Office Leasing Across Top Six Cities Up 7 percent YoY To 41.6 Mn Sq. Ft. In H1 2026: Savills India

29 July: Office space absorption across India’s six[1] major cities reached a record 41.6 mn sq. ft. in H1 2026, registering a 7% YoY increase, according to international real estate advisory firm Savills India. Meanwhile, the new supply remained stable at 23.7 mn sq. ft. in the first half, registering a decline of 5% YoY. Consequently, India’s total Grade A office stock now stands at 872.7 mn sq. ft. as of Q2 2026. However, the overall vacancy rate at the end of June declined to 13.2% from 14.7% the corresponding period last year. India‘s office absorption is projected to remain close to last year’s record levels, supported by steady occupier activity.

It is important to note that the figures presented pertain exclusively to fresh lease transactions and do not include pre-commitments or lease renewals.

Source: Savills India Research

“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, MD, Commercial Advisory and Transactions, Savills India. 

Key Highlights of H1 2026 for the India office market

• Gross office leasing across India reached 41.6 mn sq. ft. in H1 2026, up 7% YoY. New supply declined by 5% YoY to 23.7 mn sq. ft.
• Bengaluru reinforced its position as India‘s leading office market, capturing 32% of the total office space absorption in H1 2026. Pune followed with a 15.4% share, while Delhi-NCR contributed 15% to the total leasing.
• Technology continued to dominate office leasing activity, accounting for 35% of total absorption, while flexible workspaces and BFSI followed with 18% and 15% share, respectively.
• Large-sized transactions (100,000 sq. ft. and above) continued to dominate office leasing activity in H1 2026, accounting for 53% of the total leasing volume.
• GCCs leased 20.0 mn sq. ft. in H1 2026, accounting for 48% of India‘s total office absorption. While Hyderabad city recorded the highest GCC share, accounting 73% of total leasing by GCC firms, Bengaluru stood at the second position with 65% share.

CITY-WISE KEY TRENDS

• Bengaluru retained its leadership in India‘s office market in H1 2026, recording 13.1 mn sq. ft. of gross absorption, with GCCs contributing 8.5 mn sq. ft. or nearly 65% of overall leasing. Further, IT-BPM and Flexible Workspaces, together accounted for around 62% of sectoral absorption. Despite geopolitical uncertainties, the city’s robust talent pool, strong technology ecosystem, and a 20% YoY increase in new supply continued to underpin resilient leasing activity and occupier confidence.
• Delhi-NCR recorded 6.2 mn sq. ft. of gross absorption in H1 2026, ranking third after Bengaluru, and Pune. Flexible workspaces and the IT-BPM sector continued to lead leasing activity, contributing 26% and 19% to the overall volumes, respectively. While research and consulting outpaced the BFSI sector, emerging as the third largest contributor with an absorption of 0.7 mn sq. ft. (a 12% share). Leasing by GCC firms remained a prominent demand driver, accounting for 31% of total leasing.
• Mumbai recorded 6.0 mn sq. ft. of gross absorption in H1 2026, driven by the BFSI with 1.6 mn sq. ft. of leasing, followed by IT-BPM at 0.8 mn sq. ft. and Real Estate at 0.6 mn sq. ft. The city emerged as India‘s leading market for Real Estate and Edtech leasing and ranked second in BFSI leasing, while GCCs accounted for 23% of total absorption, reflecting its diversified occupier base. Small-sized transactions (below 25,000 sq. ft.) contributed over half of total leasing activity, while new supply rose 74% YoY to 3.3 mn sq. ft. indicating continued developer confidence in the market’s long-term demand fundamentals.
• Chennai witnessed 4.0 mn sq. ft. of gross office leasing in H1 2026, as occupiers adopted a cautious approach amid global economic uncertainty. Even so, mid-sized deals (25,000 sq. ft. or more) comprised 52% of total leasing activity, reinforcing the preference for scalable office formats.
• Hyderabad recorded 5.9 mn sq. ft. of gross office absorption in H1 2026, registering 9% YoY growth. Leasing activity was tempered by prolonged decision-making cycles and early-year geopolitical uncertainties, while GCCs remained the key demand drivers, accounting for 73% of gross leasing with 4.3 mn sq. ft. transacted.
• Pune recorded 6.4 mn sq. ft. of gross absorption in H1 2026, registering a 56% YoY increase and the highest half-yearly leasing volume in the last decade. The city emerged as India‘s second-largest office market after Bengaluru. Leasing activity was primarily driven by IT-BPM, Flexible Workspaces and Engineering & Manufacturing, with the latter replacing BFSI among the top three demand drivers. Pune ranked first among India‘s leading office markets for Engineering & Manufacturing leasing, while GCCs accounted for approximately 2.7 mn sq. ft., with a 42% share of the total leasing activity.