PUNE: Demand for office space in Pune saw a decline in the first quarter (January-March) of 2026, with net absorption dropping to 1.1 million sq. ft. from 2 million sq. ft. in the same period last year, according to Anarock data. Experts believe this decrease stems from the strong leasing activity in 2025, rather than a structural slowdown.
P. Vilas, head of operations at Knight Frank India’s Pune branch, mentioned that although leasing has slowed down, Global Capability Centers (GCCs) still play a significant role in driving demand, accounting for 55% of Pune’s office market, well above the 47% average in other major Indian cities.
However, external factors may create challenges. Gautam Shahi, senior director at Crisil Ratings, noted that increased geopolitical uncertainties could affect GCC expansion plans. He also mentioned potential disruptions in the IT and ITeS sectors due to the impact of Artificial Intelligence (AI) on hiring and office space requirements.
The dip in demand coincided with a significant drop in supply. Peush Jain, Managing Director of commercial leasing and advisory at Anarock Group, highlighted that completions fell by 69%, totaling only 1 million sq. ft.
This supply-demand imbalance has tightened the market, with vacancy rates declining to 11.6% and average monthly rents rising by 6% to ₹88 per sq. ft. Jain remarked, “This shows that occupiers still prioritize quality space.” Pune continues to be one of India’s most resilient office markets due to its strong GCC presence.
Market trends indicate a growing “flight to quality.” Veera Babu, Executive Managing Director of tenant representation at Cushman & Wakefield, noted that sustained tenant interest is outstripping the availability of premium office spaces.
“We are witnessing a clear imbalance between supply and demand, particularly for Grade A and A+ properties in key business districts,” Babu said, adding that occupiers increasingly seek premium, centrally located buildings that accommodate modern technology, evolving workplace cultures, and sustainability practices.
Industry experts anticipate that vacancy levels will remain tight in the foreseeable future, especially for high-quality assets in established business areas.
