NEW DELHI: In Q1 2026, net absorption of grade-A office space in India’s top seven cities reached 13.5 million sq ft, reflecting a 5% increase from 12.9 million sq ft in the same period last year, as reported by Anarock Research & Advisory.
Bengaluru led the way with a remarkable net absorption of 4.77 million sq ft, a 67% rise compared to 2.85 million sq ft in Q1 2025. Hyderabad followed closely with 2.95 million sq ft, marking a 64% year-on-year increase, while Chennai saw an absorption of 1.05 million sq ft, a 50% uplift.
Kolkata also experienced growth, recording a 20% rise in net absorption to 0.30 million sq ft from 0.25 million sq ft a year earlier. In contrast, the Mumbai Metropolitan Region (MMR), NCR, and Pune saw declines in net absorption. MMR’s absorption fell 31% year-on-year to 1.8 million sq ft, NCR dropped 43% to 1.53 million sq ft, and Pune faced a 45% decrease to 1.1 million sq ft, down from two million sq ft in Q1 2025.
Overall, vacancy rates for grade-A office spaces across the top seven cities decreased to 15.5% in Q1 2026, compared to 16.3% in Q1 2025. Chennai boasted the lowest vacancy rate at 8.9%, with Bengaluru and Pune at 11.5% and 11.6%, respectively.
Hyderabad maintained the highest vacancy among the top cities, though it improved to 24.7% from 26.5% a year prior. NCR’s vacancy was at 21% in Q1 2026, down from 22.4% in Q1 2025, while MMR’s vacancy rate declined to 13.8% from 15.2%. Kolkata’s vacancy dropped to 17.2% from 17.9%.
Anarock also reported that grade-A office absorption in 2025 reached 58.2 million sq ft, reflecting a 17% annual growth. Bengaluru, Hyderabad, and Chennai collectively accounted for about half of this total net absorption.
The report highlighted that global capability centres (GCCs) have emerged as a key driver of office leasing demand. GCCs represented 41% of grade-A gross leasing in 2025, an increase from 36% in 2024, and their share further climbed to 47% of gross leasing in Q1 2026, totaling approximately 21.12 million sq ft.
In Q1 2026, GCCs leased 9.87 million sq ft nationwide, with Bengaluru making up around 40% of this demand.
Average monthly rental rates for grade-A offices across these cities rose to ₹93 per sq ft in Q1 2026. This marks a growth from ₹92 per sq ft in 2025, which was a six percent increase year-on-year. Bengaluru recorded the highest rental growth, with office rents increasing by nine percent year-on-year in 2025 and 11 percent quarter-on-quarter in Q1 2026.
Anarock noted that grade-A offices command a rental premium of up to 20% over mid-tier assets, depending on their location and specifications. The report added that older and secondary-grade office buildings have higher vacancy rates, generally in the range of 20-25%, as occupiers increasingly favor grade-A properties.
New grade-A office supply across the top seven cities totaled 52 million sq ft in 2025, an eight percent year-on-year increase. Southern markets accounted for 52% of this new supply during the year. However, new completions decreased by 18% year-on-year in Q1 2026, falling to 8.6 million sq ft from 10.53 million sq ft in Q1 2025.
The report indicated that India is expected to have 2,200-2,300 GCCs by 2030, valued at around $100-110 billion, which is likely to maintain concentrated demand for grade-A office assets. Mid-tier office owners may need to upgrade their properties or shift focus to occupiers, such as domestic SMEs and flexible operators, where competition for grade-A space is relatively lower.
