NEW DELHI: According to a report by Vestian, India’s office space completions plunged 36% quarter-on-quarter, reaching 9.7 million sq ft in Q1 2026, the lowest in a year. The slowdown can be attributed to global uncertainties, including the West Asia conflict, causing developers to adopt a more cautious stance. Cities like Bengaluru, Hyderabad, and Mumbai were significantly affected, with Hyderabad’s completions dropping to just 0.3 million sq ft from 6 million sq ft in the previous quarter.
Despite this reduction in supply, office demand remained strong, with absorption increasing by 20% year-on-year to 21.53 million sq ft, driven by sustained interest from global capability centres (GCCs).
The disparity between strong demand and limited supply has tightened vacancy rates, with the national vacancy rate declining from 10.8% to 9.5% in Q1 2026. Rental rates also continued to improve across key markets.
In terms of performance, Bengaluru emerged as the leader in both leasing and supply, achieving 4.91 million sq ft of absorption and 4.20 million sq ft of completions. Pune reported its highest quarterly absorption at 3.92 million sq ft, while NCR experienced a 75% increase in new completions, reaching 1.40 million sq ft.
Chennai saw a notable rise in new supply from a low baseline, whereas Hyderabad recorded the highest rental growth among major markets, with a year-on-year increase of 5.3%. Mumbai continued to be the priciest office market, with average rentals at ₹152.6 per sq ft per month.
