New Delhi, April 20 (NationPress) In a notable development, office absorption in India surged by 20 percent to reach 21.53 million square feet during the first quarter of 2026 (January-March), even amidst a slowdown in new completions. This increase reflects a strong demand from occupiers, despite the ongoing conflicts in West Asia and various global economic challenges, as highlighted in a recent report released on Monday.

This impressive growth is largely attributed to India’s appeal to international occupiers who are looking for operational efficiency and scalable growth, according to insights from a Vestian report.

Favorable economic conditions—characterized by steady GDP growth, manageable inflation, and stable interest rates—have created an environment conducive to business expansion across various regions.

However, new completions saw a decline of 36 percent quarter-on-quarter, totaling 9.7 million sq ft in Q1. Major cities such as Bengaluru, Hyderabad, and Mumbai played a significant role in this downturn as developers adopted a more cautious approach in light of current uncertainties, the report stated.

The combination of strong absorption rates and limited supply has led to a decrease in vacancy rates across the prominent office markets.

Nationwide, the vacancy rate improved to 9.5 percent, down from 10.8 percent in the previous quarter, while rental prices continued to climb. This trend signifies a shift towards a landlord-driven market, particularly in sought-after and emerging business districts.

“The resilience of India’s office market in the first quarter of 2026, despite global geopolitical tensions, is commendable. The persistent leasing activity, especially from GCCs, underscores India’s growing status as a strategic hub for global businesses,” stated Shrinivas Rao, FRICS, CEO of Vestian.

While supply chain challenges have temporarily slowed new completions, robust absorption rates have tightened vacancies and spurred rental increases.

Looking forward, the rapid expansion of GCCs, coupled with an increasing demand for sustainable office spaces and a stable macroeconomic environment in India, is expected to catalyze the next phase of growth in the office sector, Rao added.

Bengaluru continued to lead in both leasing and supply, with an absorption rate of 4.91 million sq ft and 4.20 million sq ft of new completions in Q1.

Mumbai remains the priciest office market in India, with average rentals soaring to Rs 152.6 per sq ft per month during Q1 2026.

In the Delhi-NCR region, new completions reached 1.40 million sq ft in Q1 2026, marking the highest quarterly growth of 75 percent among the top seven cities, according to the report.