April 13:India’s office market has entered 2026 on a strong footing, with total office space absorption across six major cities reaching 21.6 million sq. ft. in Q1 2026, marking a 10% year-on-year growth, according to Savills India Research.
During the same period, new supply stood at 7.9 million sq. ft., reflecting a 28% YoY decline, while the overall vacancy rate improved to 13.9%, driven by sustained leasing momentum and controlled supply additions.
Market Overview
- Demand (Q1 2026): 21.6 mn sq. ft. | 2026 Forecast: 75.0 mn sq. ft.
- Supply (Q1 2026): 7.9 mn sq. ft. | 2026 Forecast: 86.6 mn sq. ft.
- Grade A Stock: 855.6 mn sq. ft. | Expected to reach 933.1 mn sq. ft.
Commenting on the market performance, Naveen Nandwani, MD – Commercial Advisory and Transactions, Savills India, said:
“India’s office market has entered 2026 on a strong footing despite global headwinds, with Q1 absorption of 21.6 million sq. ft., up 10% year-on-year. Demand remains resilient, led by technology, BFSI, manufacturing, and flexible workspace operators, with global capability centers (GCCs) continuing to fuel the momentum.”
Key Highlights – Q1 2026
- Strongest leasing activity in the past five years at 21.6 mn sq. ft.
- Bengaluru led with 28% share, followed by Hyderabad (21%) and Delhi-NCR (17%)
- Technology sector dominated with 32% share, followed by flexible workspaces (22%) and BFSI (12%)
- Large deals (100,000 sq. ft. and above) contributed 52% of total leasing
- Bengaluru and Delhi-NCR accounted for nearly two-thirds of new supply
- GCC leasing remained strong, led by Bengaluru (38%), Hyderabad (37%), and Pune (12%)
City-wise Performance Trends
- Bengaluru retained its top position with 6.0 mn sq. ft. leasing, up 25% YoY, driven by IT-BPM and flexible workspace sectors
- Delhi NCR recorded 3.6 mn sq. ft. absorption, with strong demand from flexible workspace and IT-BPM sectors; Gurugram led with 63% share
- Mumbai saw 2.8 mn sq. ft. absorption, down 15% YoY, impacted by delayed expansion plans; BFSI remained the key driver
- Pune recorded 3.0 mn sq. ft., up 20% YoY, driven by IT-BPM, flexible workspace, and manufacturing sectors
- Hyderabad posted 4.3 mn sq. ft., up 39% YoY, with large deals contributing 70% and GCCs accounting for ~77% of leasing
- Chennai witnessed steady activity, led by mid-sized deals (25,000 sq. ft. and above), accounting for 63% of leasing
Outlook
India’s office market continues to demonstrate resilience amid global uncertainties, supported by strong occupier demand, expansion of Global Capability Centers (GCCs), and the growing role of flexible workspaces.
With disciplined supply and sustained leasing momentum, the sector is expected to maintain a positive growth trajectory through 2026, further reinforcing India’s position as a key global office market destination.
