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India's office leasing market recorded gross absorption of 21.6 million sq ft across six major cities in the first quarter of 2026, reflecting a 10% year-on-year increase, according to a report by Savills India. The growth was led by strong occupier demand, particularly from technology firms, flexible workspace operators, and global capability centres (GCCs). Bengaluru emerged as the leading market with 6 million sq ft of leasing activity, followed by Hyderabad and Delhi-NCR. While demand strengthened, new supply declined 28% to 7.9 million sq ft, contributing to a moderation in vacancy levels to 13.9%. Large transactions exceeding 100,000 sq ft accounted for over half of total leasing, indicating continued preference for scale among occupiers despite prevailing global economic uncertainties.
India's office real estate market recorded gross leasing of 21.6 million sq ft during the January-March quarter of 2026, marking a 10% year-on-year increase, according to a Savills India report released in the past week, with demand driven by technology firms, flexible workspace operators, and global capability centres across six major cities. Advertisement
The report indicated that this quarterly performance represents the strongest leasing activity in the past five years, despite ongoing global economic uncertainties. Demand was led by the technology sector, which accounted for 32% of total leasing, followed by flexible workspace operators at 22% and banking, financial services, and insurance (BFSI) firms at 12%.
Large office transactions of 100,000 sq ft and above contributed more than half of the total leasing volume, reflecting occupiers continued preference for larger, consolidated workspaces. Global capability centres remained a key contributor to leasing momentum, with significant activity concentrated in southern markets.
Among cities, Bengaluru led absorption with approximately 6 million sq ft, accounting for nearly 28% of the total leasing volume and registering a 25% annual growth. Hyderabad followed with 4.3 million sq ft, representing about 21% of total leasing, supported by strong GCC demand. Delhi-NCR recorded 3.6 million sq ft, maintaining stable year-on-year performance.
Pune reported leasing of 3 million sq ft, reflecting a 20% increase compared to the previous year, while Chennai saw absorption of 1.9 million sq ft, registering a decline of 17%. Mumbai recorded 2.8 million sq ft of leasing activity, reflecting a 15% year-on-year decline, attributed to delayed expansion decisions by occupiers amid evolving global conditions.
On the supply side, new completions declined by 28% year-on-year to 7.9 million sq ft during the quarter. Bengaluru and Delhi-NCR together accounted for nearly two-thirds of the new supply, with a combined addition of around 5 million sq ft. The moderation in supply, coupled with sustained demand, contributed to a decline in overall vacancy levels to 13.9%.
The report further noted that the strong start to the year positions total office demand for 2026 at an estimated 75 million sq ft, while projected supply is expected to reach approximately 86.6 million sq ft.
Savills India's managing director for commercial advisory and transactions indicated that the office market had entered the year on a firm footing despite global headwinds, with demand supported by a mix of technology, BFSI, manufacturing, and flexible workspace occupiers, while GCCs continued to play a central role in driving leasing activity.
The sustained demand, combined with calibrated supply additions, has contributed to stabilising vacancy levels, with leasing activity expected to remain steady over the course of the year.
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