India office market maintains strong momentum with 18.3 msf leasing in Q1 2026, up 15% YoY: Colliers India

• Bengaluru & Hyderabad drive space uptake, collectively accounting for nearly half of the leasing activity
• Conventional leasing remains strong at 14.4 msf, Technology firms drive 36% of conventional space uptake during Q1 2026
• Flex spaces gain share, accounting for 21% of the overall leasing in Q1 2026
• New supply remains strong at 11.8 msf during Q1 2026, a 19% YoY rise
• Vacancy levels decline close to 90 basis points on an annual basis to 15.3%

Bengaluru, 26 March 2026: India’s office market across the top seven cities has started on a strong note in 2026, registering 18.3 million sq ft of leasing activity in the first quarter, up by 15% year-on-year (YoY). This continued momentum has been supported by strengthening occupier demand across sectors and expanding Global Capability Centers (GCCs) footprint, despite ongoing global uncertainties. Bengaluru, followed by Hyderabad, together accounted for nearly half of the quarterly leasing activity, cumulatively contributing 8.7 million sq ft of demand. Meanwhile, Grade A space uptake was firm in cities like Mumbai, Pune, Delhi NCR and Chennai, with each of them witnessing leasing in the range of 2-3 million sq ft. Interestingly, office space demand in Hyderabad and Pune more than doubled on an annual basis during Q1 2026.

“India’s office demand continues to display strong resilience, with 18.3 million sq ft of Grade A space uptake recorded across the top seven markets in Q1 2026, reflecting a 15% YoY growth. Space uptake from GCCs too has been firm, accounting for almost half of the overall demand. Although global headwinds continue to loom large and can potentially impact completion timelines, demand side outlook for 2026 remains positive at this juncture. The Indian office market will continue to be one of the best performing markets in the APAC region, supported by long-term GCC expansion, diversification of occupier base, strengthening of flex space offerings and growing preference for high-quality assets,” said Arpit Mehrotra, Managing Director, Office Services, India, Colliers.

Trends in Grade A gross absorption (in million sq ft)

Source: Colliers

Gross absorption does not include lease renewals, pre-commitments and deals where only a letter of Intent has been signed.

The top 7 cities include Bengaluru, Chennai, Delhi-NCR, Hyderabad, Kolkata, Mumbai, and Pune

Completions at 11.8 msf in Q1 2026; New supply sees equally strong 19% YoY rise

New supply across the top seven cities remained strong at 11.8 million sq ft, up 19% YoY in the first quarter of the year. With around 47% share in overall supply additions, Bengaluru drove majority of the quarterly completions, followed distantly by Delhi NCR with a share of 17%. Additionally, Chennai and Mumbai saw completions to the tune of 1.5 million sq ft each, contributing around 13% of the supply additions during Q1 2026.

Trends in Grade A new supply (in million sq ft)

Source: Colliers

Top 7 cities include Bengaluru, Chennai, Delhi-NCR, Hyderabad, Kolkata, Mumbai, and Pune

New supply is negligible in Hyderabad and Kolkata during Q1 2026

Technology firms drive 36% of conventional space uptake in Q1 2026; Flex space demand continues to witness sustained growth

Trends in conventional and flex space leasing (in million sq ft)

Source: Colliers

Data pertains to top 7 cities – Bengaluru, Chennai, Delhi-NCR, Hyderabad, Kolkata, Mumbai, and Pune

During Q1 2026, leasing in conventional spaces remained robust at 14.4 million sq ft driven by Technology and BFSI occupiers. These two sectors together drove nearly two-thirds of the conventional space uptake, with 9.5 million sq ft of cumulative leasing during the quarter. While Bengaluru & Mumbai accounted for majority of the space uptake by BFSI firms during the quarter, in case of Technology firms, Bengaluru & Hyderabad collectively drove more than 60% of the demand.

Leasing activity by flex space operators too witnessed a notable 77% YoY increase in Q1 2026 with close to 4 million sq ft of space uptake. Delhi NCR followed by Hyderabad together drove more than 45% of the flex space leasing. Interestingly, flex space adoption in cities like Kolkata & Delhi NCR was notably strong, with at least 40% of quarterly leasing of respective cities being driven by flex operators. Further, flex operators contributed nearly one-fourth of the quarterly demand in each of the cities like Hyderabad, Chennai & Pune.

“Q1 2026 reaffirms continued strengthening of India’s office market led by tech occupiers and notable traction from a wider occupier base including BFSI, engineering & manufacturing firms etc. Both Technology and BFSI sectors significantly expanded their office footprint, with higher space uptake on an annual basis and cumulatively accounted for two-thirds of conventional office space demand in Q1 2026. At the same time, leasing by flex space operators continued to gain momentum, registering close to 4 million sq ft of Grade A space uptake, around 77% higher than the leasing in corresponding quarter of 2025. This reiterates the increased occupier focus on incorporating flex spaces into their portfolios for scalability, cost arbitrage, risk mitigation, and hybrid work enablement,” saidVimal Nadar, National Director and Head of Research, Colliers India.

As demand continues to outpace new supply consistently, overall vacancy levels dropped by close to 90 basis points on an annual basis, to around 15.3% at the end of Q1 2026. In fact, 4 out of 7 top office markets witnessed significant drop in vacancy levels of at least 100 bps on a YoY basis during the quarter. Meanwhile, average office rentals across the top seven markets firmed up by around 6% YoY.