The office leasing market in India expanded by 10% year-on-year to 21.6 million sq ft in the first quarter of 2026, marking the most robust activity in five years. Supply decreased by 28% to 7.9 million sq ft, while the vacancy rate dropped to 13.9% during this period, supported by consistent leasing and controlled supply additions.
The technology sector led the leasing activity with a 32% share, followed by flexible workspaces at 22% and BFSI at 12%, according to the Savills India report. Deals of 100,000 sq ft or more drove 52% of total transactions in the quarter.
Naveen Nandwani, MD of Commercial Advisory and Transactions at Savills India, stated, “India’s office market started 2026 strongly with 21.6 million sq ft absorption, a 10% increase year-on-year.” Demand, fueled by technology, BFSI, manufacturing, and flexible workspaces, remains robust, with global capability centers (GCCs) sustaining the momentum.
Bengaluru and Delhi-NCR contributed around 5 million sq ft of new completions, nearly two-thirds of India’s total supply. Bengaluru led the office market with 6 million sq ft of leasing, up 25% year-on-year, driven by IT-BPM operators. Delhi-NCR saw a gross absorption of 3.6 million sq ft in Q1 2026.
Hyderabad experienced a 39% year-on-year rise in gross absorption to 4.3 million sq ft, supported by large deals and GCC occupiers. Pune also witnessed healthy growth, with a 20% increase in leasing to 3 million sq ft. However, Mumbai’s gross absorption declined by 15% to 2.8 million sq ft due to delayed expansion plans by occupiers.
