India’s Office Market Defies Global Headwinds with Record 21.6 Million Sq. Ft. Absorption in Q1 2026: Savills
New Delhi, April 13, 2026: India’s commercial real estate sector has demonstrated remarkable resilience in the face of global economic uncertainty, recording 21.6 million square feet of office space absorption in the first quarter of 2026. According to the latest data from Savills India, this represents a 10% year-on-year growth, marking the strongest leasing activity seen in the last five years.
The surge in demand comes as new supply additions saw a disciplined decline of 28% year-on-year, totaling 7.9 million square feet for the quarter. This imbalance between high demand and controlled supply has caused the overall vacancy rate to ease to 13.9%. Current projections for the full year 2026 estimate total demand will reach 75 million square feet, supported by a projected supply pipeline of 86.6 million square feet.
Naveen Nandwani, MD of Commercial Advisory and Transactions at Savills India, emphasized the strength of the market despite international pressures. “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,” Nandwani said. “Demand remains resilient, led by technology, BFSI, manufacturing, and flexible workspace operators, with global capability centers (GCC) continuing to fuel the momentum.”
Bengaluru remains the dominant force in the national landscape, accounting for 28% of all leasing activity, followed by Hyderabad at 21% and Delhi-NCR at 17%. From a sectoral perspective, technology companies led the charge with a 32% share of transactions, while flexible workspace providers and the Banking, Financial Services, and Insurance (BFSI) sectors contributed 22% and 12%, respectively. Notably, large-scale deals involving spaces of 100,000 square feet or more made up 52% of the total volume.
In a city-wise breakdown, Bengaluru reaffirmed its leadership with 6.0 million square feet of leasing, a 25% increase from the previous year, primarily driven by IT-BPM and flexible workspace operators. Hyderabad recorded the highest year-on-year growth at 39%, with 4.3 million square feet absorbed. A staggering 77% of Hyderabad’s leasing activity was attributed to Global Capability Centers (GCCs), underscoring the city’s appeal to international firms.
Meanwhile, Delhi-NCR maintained steady performance with 3.6 million square feet of absorption, with Gurugram commanding a 63% share of the region’s total. In contrast, Mumbai saw a 15% decline in activity to 2.8 million square feet, a dip attributed to occupiers delaying expansion plans due to shifting global dynamics. Pune, however, moved into fourth place nationally with a 20% increase in take-up, fueled by engineering, manufacturing, and tech sectors. Chennai also showed a unique trend, where mid-sized deals drove 63% of its local market activity.
The report highlights that the expansion of GCCs continues to be a primary catalyst for the Indian office market. Bengaluru secured the largest share of GCC leasing at 38%, followed closely by Hyderabad at 37%. As digital transformation and high-performance computing needs grow, these centers are expected to remain a vital component of the 933.1 million square feet of Grade A stock projected to be in place by the end of 2026.
