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Net leasing of office space across India's top eight cities declined 24 per cent in the January-March 2026 quarter to 11.51 million sq ft, according to Cushman & Wakefield, due to softer demand and an 18 per cent fall in new supply. Despite this, gross leasing rose 13 per cent year-on-year to 21.89 million sq ft, supported largely by global capability centres, which accounted for around 40 per cent of demand. Vacancy levels are gradually tightening as demand continues to outpace quality supply, while corporates remain cautious amid global uncertainties, though long-term market sentiment remains steady.
Net leasing of office space across India's top eight cities recorded a 24 per cent decline in the January-March 2026 quarter, settling at 11.51 million sq ft. The fall was linked to weaker demand conditions and an 18 per cent reduction in fresh supply of office spaces. Advertisement
Net leasing, also known as absorption, refers to the net change in occupied office space and is considered a key indicator of real estate demand trends.
The performance covers Delhi-NCR, Mumbai, Bengaluru, Hyderabad, Chennai, Pune, Kolkata and Ahmedabad, which together represent the country's major office markets.
Market observers noted that corporate expansion activity may have slowed due to global geopolitical concerns, including tensions in West Asia. However, the medium to long-term outlook for India's office sector continues to remain stable.
The decline in net leasing was also attributed to reduced fresh leasing activity after a strong performance in the previous year, along with delays in the completion of office projects, which restricted the conversion of pre-committed demand into physical occupancy.
Fresh office supply across the eight cities stood at 8.8 million sq ft during the quarter, marking an 18 per cent year-on-year decline. This drop was largely due to project completion delays.
In contrast, gross leasing activity increased by 13 per cent year-on-year to 21.89 million sq ft from 19.3 million sq ft in the corresponding period earlier, indicating steady overall market activity. Gross leasing includes fresh leasing, renewals, and pre-leasing activity.
According to Cushman & Wakefield, the office market has continued the momentum carried forward from the previous year. Global capability centres remained a major driver of demand, contributing around 40 per cent of total leasing activity.
The consultancy firm noted that this steady demand is gradually tightening market conditions, with vacancy levels showing a steady decline due to a persistent imbalance between supply and demand, especially in premium-grade office spaces.
Looking ahead, around 61 million sq ft of new office supply is expected to enter the market. A significant portion of this pipeline is premium Grade A+ space, which may provide some easing in vacancy levels over time.
However, sustained absorption and pre-commitment levels are likely to keep vacancy rates broadly stable, while rental trends are expected to remain firm even with new supply additions.
Industry representatives also highlighted that corporates are increasingly prioritising quality assets, better locations, and future-ready infrastructure that supports technology and sustainability requirements. Demand is expected to remain resilient despite near-term caution in expansion plans.
Source PTI
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