NEW DELHI: In the first half of 2026, office leasing in India’s top eight cities reached 48 million sq ft, representing a slight two percent decline compared to the previous year, according to Knight Frank India.
However, supply additions surged by 35 percent year-on-year, totaling 27.1 million sq ft during this period. The total office stock in these markets increased to 1,054.6 million sq ft, marking a six percent annual growth.
Vacancy rates remained relatively stable, dipping slightly by 12 basis points year-on-year to 14.6 percent in H1 2026.
Bengaluru led the office leasing market with 14.1 million sq ft of transactions, despite a 23 percent decline from the previous year. Hyderabad experienced significant growth, leasing 7.5 million sq ft—up 29 percent—while Mumbai saw a 33 percent increase to 7.3 million sq ft.
The National Capital Region (NCR) recorded 7.2 million sq ft of leasing, down one percent year-on-year. Pune reported a 29 percent rise to 6.6 million sq ft, while Chennai, Kolkata, and Ahmedabad recorded 3.6 million sq ft, 0.8 million sq ft, and 0.8 million sq ft, respectively.
Global capability centers (GCCs) were significant demand drivers, making up 43 percent of the market with 20.6 million sq ft leased, a rise from 39 percent in H1 2025. Bengaluru captured the majority of GCC leasing at 41 percent, with Mumbai and Hyderabad each holding a 16 percent share.
Flexible workspace operators also expanded their presence, accounting for 24 percent of total transactions with 11.4 million sq ft, up from 21 percent the previous year.
Businesses focused on India contributed 20 percent of leasing activity with 9.5 million sq ft, while third-party IT services accounted for 13 percent with 6.4 million sq ft, a drop from 22 percent a year ago.
Demand for Grade-A office assets remained high, representing 91 percent of all transactions across the eight cities.
In terms of supply, Bengaluru led with new completions of 10.4 million sq ft, reflecting a remarkable 407 percent annual increase. NCR and Pune each added approximately four million sq ft, while Hyderabad contributed three million sq ft.
Rental growth was positive across most markets, with Kolkata showing the highest annual rental increase at 15 percent, followed by NCR at 13 percent, Bengaluru at eight percent, and both Chennai and Hyderabad at seven percent each. Pune experienced a six percent increase. Mumbai’s rents remained stable at ₹130 per sq ft per month on an annual basis, although they rose four percent over the past six months.
