Indian Office Leasing Reaches Record 41.6 Million Square Feet in First Half of 2026: Savills India
New Delhi, July 29, 2026: Office space absorption across India’s top six major cities reached a record 41.6 million square feet in the first half of 2026, marking a 7 percent year-on-year increase, according to a report released by international real estate advisory firm Savills India. In contrast, new office supply declined by 5 percent year-on-year during the same period to 23.7 million square feet. As a result, India’s total Grade A office stock expanded to 872.7 million square feet as of the second quarter, while the overall vacancy rate dropped to 13.2 percent from 14.7 percent in the corresponding period last year. The figures reflect fresh lease transactions and exclude pre-commitments or lease renewals, Savills India said in a press release.
Market activity was strongly driven by Global Capability Centers (GCCs), which accounted for 48 percent of total absorption across the country by securing 20.0 million square feet of space. The technology sector retained its overall lead, contributing 35 percent of total leasing, followed by flexible workspaces at 18 percent and banking, financial services, and insurance (BFSI) at 15 percent. Large-format transactions of 100,000 square feet and above remained the preferred leasing scale, representing 53 percent of the total volume absorbed nationwide.
At the city level, Bengaluru reinforced its status as the nation’s primary office market, capturing 32 percent of total pan-India absorption with 13.1 million square feet, driven by a 65 percent share from GCCs and a 20 percent year-on-year expansion in new supply. Pune emerged as the second-largest market after registering 6.4 million square feet—a 56 percent year-on-year surge that marked its highest half-yearly leasing volume in a decade. Delhi-NCR ranked third with 6.2 million square feet, followed by Mumbai at 6.0 million square feet, Hyderabad at 5.9 million square feet, and Chennai at 4.0 million square feet.
“The office market has experienced a period of moderation in H1 2026 as occupiers adopted a more measured approach amid geopolitical uncertainties and evolving global economic conditions. While this slowdown is real and reflects cautious decision-making, it should be viewed as a strategic pause rather than a structural shift. India’s office market continues to be underpinned by strong GCC expansion, a deep talent pool and sustained corporate confidence. As businesses rethink their real estate strategies, we expect demand to become more selective and quality-driven, paving the way for the next phase of growth,” said Naveen Nandwani, Managing Director of Commercial Advisory and Transactions at Savills India.
Looking ahead, Savills India projects total office space demand across the six cities to reach approximately 74.0 million square feet for the full year 2026, keeping pace with an expected full-year supply pipeline of 74.6 million square feet. Supported by steady occupier interest, sustained corporate confidence, and an expanding national Grade A stock expected to reach 921.8 million square feet by the year’s end, leasing activity is forecast to remain near last year’s record levels.
