NEW DELHI: India’s office market achieved a gross absorption of 21.6 million sq ft across six major cities in the January-March quarter of 2026, reflecting a 10% year-on-year increase, as reported by Savills India. This growth comes against a backdrop of global economic uncertainties.
The quarter also saw a 28% year-on-year decline in new supply, totaling 7.9 million sq ft, which contributed to a decrease in overall vacancy rates to 13.9% amid consistent leasing activity.
The robust beginning of the year positions the total office demand for 2026 at an estimated 75 million sq ft, while supply is anticipated to reach 86.6 million sq ft.
Bengaluru led the leasing with 6 million sq ft, making up 28% of total absorption, and showing a 25% annual growth. Hyderabad followed with 4.3 million sq ft (21% share), and Delhi-NCR reported 3.6 million sq ft, maintaining stable demand year-on-year.
Pune experienced a 20% rise in leasing to 3 million sq ft, while Mumbai saw a 15% drop to 2.8 million sq ft, attributed to postponed expansion plans amid changing global conditions. Chennai recorded 1.9 million sq ft of absorption, a 17% annual decrease.
The quarter’s demand was primarily driven by technology companies, which accounted for 32% of leasing activity, followed by flexible workspace operators at 22%, and BFSI firms at 12%.
Large transactions of over 100,000 sq ft contributed to more than half of the total leasing activity, underscoring the continued preference for larger spaces.
Global capability centres (GCCs) were significant demand drivers, with Bengaluru representing 38% of GCC leasing, closely followed by Hyderabad at 37%. In Hyderabad, GCCs accounted for nearly 77% of total leasing during the quarter.
On the supply side, Bengaluru and Delhi-NCR together contributed nearly two-thirds of new completions, with a combined addition of approximately 5 million sq ft.
“The office market starts 2026 on a solid foundation despite global challenges, with demand driven by technology, BFSI, manufacturing, and flexible workspace providers, while GCCs continue to propel leasing momentum,” stated Naveen Nandwani, Managing Director of Commercial Advisory and Transactions at Savills India.
The report emphasized that controlled supply additions and sustained demand have stabilized vacancy levels, with leasing activity expected to remain consistent throughout the year.
