NEW DELHI: Office leasing in India’s top seven cities surged 15% year-on-year to 18.3 million sq ft in Q1 2026, fueled by demand from technology companies, BFSI sectors, and global capability centers (GCCs), as reported by Colliers India.
Bengaluru and Hyderabad combined accounted for nearly half of the total leasing this quarter, totaling about 8.7 million sq ft. Other key markets, including Mumbai, Delhi-NCR, Pune, and Chennai, saw a steady absorption of 2-3 million sq ft each of Grade A spaces.
Arpit Mehrotra, Managing Director of Office Services in India for Colliers, remarked, “India’s office demand exhibits strong resilience, with 18.3 million sq ft of Grade A space leased in Q1 2026. GCCs have played a significant role, constituting nearly half of the overall activity.”
Technology and BFSI Drive Demand
Conventional office leasing reached 14.4 million sq ft this quarter, with the technology and BFSI sectors making up nearly two-thirds of the overall demand.
Technology firms accounted for 36% of conventional leasing, with Bengaluru and Hyderabad driving over 60% of that demand. BFSI leasing was mainly focused in Bengaluru and Mumbai.
This data illustrates the ongoing expansion of GCCs and the diversification of the occupier base, which supports overall absorption rates.
Rising Share of Flexible Spaces
Flexible workspace providers continue to gain momentum, with leasing climbing 77% year-on-year to nearly four million sq ft in Q1 2026. Flex spaces comprised about 21% of total leasing for the quarter. Delhi-NCR and Hyderabad led the way, contributing over 45% to this segment’s leasing activity.
Strong Supply
New office supply remained robust at 11.8 million sq ft in Q1 2026, showing a 19% increase compared to the same period last year.
Bengaluru led supply additions with a 47% share, while Delhi-NCR followed at 17%. Notable completions were also recorded in Chennai and Mumbai, each contributing around 1.5 million sq ft during the quarter.
Declining Vacancy Rates and Stabilizing Rentals
As demand outpaced supply, vacancy rates across the top seven cities dropped nearly 90 basis points year-on-year, settling at 15.3% by the end of Q1 2026. At least four of these markets saw a drop of over 100 basis points in vacancy levels.
Average office rents also experienced a 6% annual increase, driven by sustained demand for Grade A assets.
