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India’s grade-A office market recorded healthy growth in the first quarter of 2026, with net office absorption rising 5 per cent year-on-year to 13.5 million sq ft across the top seven cities, according to Anarock. Bengaluru, Hyderabad and Chennai led commercial real estate demand, while vacancy levels declined due to sustained leasing activity and controlled new supply. Global capability centres (GCCs) remained the biggest office space occupiers during the quarter, contributing nearly half of total gross leasing. Office rentals also moved up across major markets as companies continued to prefer premium office developments in key business districts.
India’s commercial real estate market continued to witness steady office leasing activity during the January-March quarter of 2026, with net absorption of grade-A office space reaching 13.5 million sq ft across the top seven cities, according to Anarock Research & Advisory. The office absorption during the same period last year stood at 12.9 million sq ft. Advertisement
The growth in office space demand was mainly supported by strong leasing activity in Bengaluru, Hyderabad and Chennai. Industry experts said demand for high-quality office assets remained stable despite global economic uncertainty, as companies continued to expand operations in India.
Bengaluru remained the largest office market in the country during the quarter, recording net absorption of 4.77 million sq ft, up 67 per cent year-on-year. Hyderabad followed with 2.95 million sq ft, registering a 64 per cent increase, while Chennai saw office absorption rise 50 per cent to 1.05 million sq ft. Kolkata also reported moderate improvement in office leasing activity.
However, some major cities witnessed a decline in office absorption during the quarter. Mumbai Metropolitan Region (MMR) recorded a 31 per cent fall in net absorption to 1.8 million sq ft. NCR saw absorption decline 43 per cent to 1.53 million sq ft, while Pune reported a 45 per cent drop to 1.1 million sq ft. Market experts indicated that lower fresh supply and delayed expansion decisions by occupiers affected leasing momentum in these markets.
India’s office vacancy levels continued to improve due to healthy demand for premium office developments. Overall grade-A office vacancy across the top seven cities declined to 15.5 per cent during the quarter from 16.3 per cent a year ago.
Among major office markets, Chennai recorded the lowest vacancy level at 8.9 per cent, followed by Bengaluru at 11.5 per cent and Pune at 11.6 per cent. Hyderabad continued to report the highest vacancy level at 24.7 per cent, although the figure improved compared to the previous year.
The report stated that global capability centres continued to remain the largest contributors to office leasing demand in India. GCCs accounted for 47 per cent of total gross leasing during the quarter, compared to 41 per cent in 2025 and 36 per cent in 2024. Gross office leasing across India stood at nearly 21.12 million sq ft during the quarter, out of which GCCs leased close to 9.87 million sq ft.
Bengaluru alone contributed around 40 per cent of total GCC leasing demand, further strengthening its position as India’s leading technology and office market. The city has continued to attract multinational companies, technology firms and engineering centres due to its strong talent base and established commercial infrastructure.
Average monthly rentals for grade-A office spaces across the top seven cities increased to INR 93 per sq ft during the quarter. Bengaluru reported the highest rental growth, with office rents increasing 11 per cent quarter-on-quarter. Industry consultants noted that occupiers are increasingly preferring premium office developments with better infrastructure, sustainability features and modern workplace facilities.
Recent reports by property consultants including JLL, Cushman & Wakefield and Vestian have also highlighted that India’s office market remains resilient despite global headwinds. Demand from technology firms, BFSI companies, manufacturing companies and flexible workspace operators has continued to support overall office leasing activity across major cities.
New office supply across the top seven cities stood at around 52 million sq ft in 2025, registering an 8 per cent year-on-year increase. Southern cities accounted for more than half of the new office completions during the year. However, fresh office supply during the first quarter of 2026 remained lower compared to the previous year as developers adopted a cautious approach amid geopolitical and economic concerns.
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