13th April 2026: Office space absorption across the six major Indian cities stood at 21.6 mn sq. ft. during Q1 2026, reflecting a 10% YoY growth. During the same period, new supply was recorded as 7.9 mn sq. ft., registering a decline of 28% YoY. Theoverall vacancy rate eased to 13.9%, driven by steady leasing activity and disciplined supply additions.
| Q1 2026 | 2026F | |
| Demand | 21.6 mn sq. ft. | 75.0 mn sq. ft. |
| Supply | 7.9 mn sq. ft. | 86.6 mn sq. ft. |
| Overall Grade A Stock | 855.6 mn sq. ft. | 933.1 mn sq. ft. |
Source: Savills India Research
| Gross Absorption (in mn sq. ft.) | Supply (in mn sq. ft.) | |||||||||
| Cities | Q1 2026 | Q1 2025 | Q4 2025 | QoQ Change | YoY Change | Q1 2026 | Q1 2025 | Q4 2025 | QoQ Change | YoY Change |
| Bengaluru | 6.0 | 4.8 | 5.9 | 2% | 25% | 3.1 | 3.7 | 7.3 | -58% | -16% |
| Chennai | 1.9 | 2.3 | 1.7 | 12% | -17% | 1.6 | 0.6 | 1.3 | 23% | 2.7x |
| Delhi-NCR | 3.6 | 3.6 | 1.9 | 89% | 0% | 1.9 | 2.0 | 2.4 | -21% | -5% |
| Hyderabad | 4.3 | 3.1 | 3.3 | 30% | 39% | 0.4 | 2.3 | 8.1 | -95% | -83% |
| Mumbai | 2.8 | 3.3 | 3.0 | -7% | -15% | 0.9 | 1.0 | 1.4 | -36% | -10% |
| Pune | 3.0 | 2.5 | 1.9 | 58% | 20% | Nil | 1.3 | 2.0 | NA | NA |
| Total | 21.6 | 19.6 | 17.7 | 22% | 10% | 7.9 | 10.9 | 22.5 | -65% | -28% |
Source: Savills India Research
“India’s office market has entered 2026 on a strong footing despite global headwinds, with Q1 absorption of 21.6 million sq. ft., up 10% year-on-year. Demand remains resilient, led by technology, BFSI, manufacturing, and flexible workspace operators, with global capability centers (GCC) continuing to fuel the momentum” said Naveen Nandwani, MD, Commercial Advisory and Transactions, Savills India.
Key Highlights of Q1 2026 for India office market
- In Q1 2026, India witnessed the strongest leasing activity in the last 5 years, reaching 21.6 mn sq. ft., a 10% YoY increase.
- Bengaluru remained the frontrunner, accounting for 28% of total leasing activity, followed by Hyderabad at 21% and Delhi-NCR with an 17% share.
- The tech sector dominated the leasing activity with 32% share, followed by flexible workspaces at 22% and BFSI at 12%.
- Large deals (100,000 sq. ft. or more) continued to dominate the gross leasing activity this quarter and contributed 52% to overall transactions.
- Bengaluru and Delhi-NCR together witnessed 5.0 mn sq. ft. of new completions in Q1 2026, comprising nearly two-thirds of the total supply added across India.
- Bengaluru remained the leading hub for GCC leasing activity in Q1 2026, securing a 38% share and outpacing other major cities. Hyderabad followed closely behind at 37%, while Pune accounted for a notable 12%, underscoring its rising prominence among key markets.
CITY-WISE KEY TRENDS
- Bengaluru reaffirmed its position as India’s leading office market, with 6.0 mn sq. ft. of leasing activity, marking a 25% YoY increase. The leasing momentum was primarily driven by IT-BPM operators, accounting for around 35% of demand, followed by the Flexible Workspace sector at 31%, highlighting their continued role as the key catalysts in the city’s commercial real estate landscape.
- Delhi-NCR recorded gross absorption of 3.6 mn sq. ft. this quarter, largely in line with the absorption witnessed in the corresponding period a year ago. Around 0.6 mn sq. ft. came from pre-commitments converting into occupancies as under-construction projects reached completion, while the remaining 3 mn sq. ft. was fresh leasing. Demand was mainly driven by flexible workspaces and IT-BPM, contributing 27% and 19% respectively. Gurugram led the absorption with a 63% share in the overall leasing basket, followedby Delhi & NOIDA with 20% & 17% share, respectively.
- Mumbai witnessed 2.8 mn sq. ft. of gross absorption in Q1 2026, registering a decline of 15% YoY. The decline can be explained against the backdrop of delayed expansion plans by occupiers due to evolving global dynamics. The conventional demand driver of BFSI sector continued to be at the top in Q1 2026 with a 28% share followed by the tech sector garnering a 13% share.
- Pune stood at fourth place with 20% YoY rise in gross absorption at 3.0 mn sq. ft., driven by higher office take-up by occupiers in IT-BPM and Flexible workspace as well as Engineering & Manufacturing sector.
- Hyderabad recorded a gross absorption of 4.3 mn sq. ft., registering a YoY growth of 39%; primarily driven by large deals (100,000 sq. ft. and more), which accounted for 3.0 mn sq. ft. and represented 70% of the overall leasing activity. The city witnesse da strong GCC presence in Q1 2026, with ~77% of its total leasing (3.3 of 4.3 mn sq. ft.) driven by GCC occupiers.
- Chennai witnessed a substantial increase in mid-size deals (25,000 sq. ft. or more), which were the key market drivers in the first quarter, accounting for 63% of the market share.
