India's Office Leasing Surges 10% to 21.6 Million Sq Ft in Q1 2026, Best in 5 Years
Synopsis
India's office leasing market has experienced a remarkable 10% growth in Q1 2026, reaching 21.6 million sq ft—the highest in five years. Key sectors driving this surge include technology and flexible workspaces, indicating a robust demand amidst global challenges.
Key Takeaways
10% YoY growth in office leasing to 21.6 million sq ft .
Technology sector leads leasing with 32% share .
Overall vacancy rate improved to 13.9% .
Bengaluru remains top market with 6 million sq ft leased.
Hyderabad shows strong growth with 39% increase in gross absorption.
New Delhi, April 13 (NationPress) The office leasing sector in India has experienced a significant 10% growth year-on-year (YoY), reaching 21.6 million sq ft in the first quarter of 2026. This marks the highest leasing activity in the last five years, as per a report released on Monday.
The Savills India report indicates that supply has decreased by 28% YoY, totaling 7.9 million sq ft, while the overall vacancy rate has improved to 13.9% during this timeframe. This positive trend is attributed to consistent leasing activities and careful supply management.
Breaking down the sectors, the technology sector led the leasing activities with a 32% share, followed by flexible workspaces at 22% and BFSI (Banking, Financial Services, and Insurance) at 12%, according to the report.
Large transactions—those exceeding 100,000 sq ft—played a crucial role, accounting for 52% of all transactions during the quarter.
“India’s office market has started 2026 on a robust note despite global challenges, with Q1 absorption of 21.6 million sq ft, reflecting a 10% YoY increase,” stated Naveen Nandwani, Managing Director of Commercial Advisory and Transactions at Savills India.
He further noted that demand remains strong, particularly from technology, BFSI, manufacturing, and flexible workspace sectors, with Global Capability Centres (GCCs) continuing to drive momentum.
Both Bengaluru and Delhi-NCR collectively contributed nearly 5 million sq ft of new completions during this period, accounting for about two-thirds of the total supply increase across India.
Regionally, Bengaluru maintained its status as the top office market, achieving 6 million sq ft in leasing activity—an impressive 25% increase YoY—primarily due to IT-BPM operators.
In comparison, Delhi-NCR recorded a gross absorption of 3.6 million sq ft in Q1 2026.
Hyderabad emerged as a strong contender with a 39% YoY increase in gross absorption, reaching 4.3 million sq ft, bolstered by significant deals and robust demand from GCC occupiers. Pune also showed positive growth, witnessing a 20% YoY rise in leasing to 3 million sq ft. Conversely, Mumbai faced a decline, with gross absorption dropping 15% YoY to 2.8 million sq ft, attributed to postponed expansion plans from occupiers.
Point of View
Highlighting strong demand especially from technology and BFSI sectors. Despite challenges, the market shows promising growth, making it a significant focal point for investors and businesses in the upcoming quarters.
NationPress
1 May 2026
Frequently Asked Questions
What was the YoY growth in office leasing in Q1 2026?
The office leasing market in India grew by **10% YoY**, reaching **21.6 million sq ft**.
Which sector accounted for the most leasing activity?
The technology sector led with a **32% share** of the leasing activity.
What is the current vacancy rate in the office market?
The overall vacancy rate has decreased to **13.9%**.
How much did Bengaluru contribute to new completions?
Bengaluru accounted for approximately **6 million sq ft** of leasing activity.
What trends are affecting the office leasing market?
Demand is driven by technology, BFSI, manufacturing, and flexible workspace sectors, alongside significant deals from GCCs.
