Office absorption in India increased by 20% to 21.53 million square feet in the first quarter of 2026 compared to the same period last year. This growth reflects sustained occupier demand amidst global challenges like the West Asia conflict. India’s appeal to global occupiers seeking efficiency and growth played a key role in this increase.
Supportive macroeconomic conditions, such as steady GDP growth and stable interest rates, created a favorable environment for businesses to expand. However, new completions decreased by 36% to 9.7 million sq ft in Q1, with cities like Bengaluru, Hyderabad, and Mumbai contributing significantly to this decline due to developers’ cautious approach.
The combination of strong absorption and limited supply led to a decrease in vacancy levels across major office markets. The overall vacancy rate in India improved to 9.5% from 10.8% in the previous quarter, signaling a shift towards a landlord-driven market, especially in prime business districts.
India’s office market demonstrated resilience in the face of global challenges, with sustained leasing activities driven by global corporations. Despite temporary supply chain constraints affecting new completions, robust absorption levels have tightened vacancies and boosted rental rates. Looking ahead, factors like GCC expansion, demand for sustainable office spaces, and a stable macroeconomic environment are expected to drive further growth in the office sector.
Bengaluru led in both leasing and supply, recording significant absorption and new completions in Q1. Mumbai remained the most expensive office market in India, with average rentals hitting Rs 152.6 per sq ft per month in Q1 2026. Delhi-NCR saw a notable 75% quarterly growth in new completions, reaching 1.40 million sq ft in the same period.
