New Delhi, March 2026 – India’s office market across the top seven cities has started 2026 on a strong note, registering 18.3 million sq ft of leasing activity in the first quarter, up 15% year-on-year according to Colliers India. The growth was supported by strengthening occupier demand across sectors and an expanding Global Capability Centre footprint. Bengaluru and Hyderabad together accounted for nearly half of the quarterly leasing activity, cumulatively contributing 8.7 million sq ft of demand. Grade A space uptake was firm in Mumbai, Pune, Delhi-NCR, and Chennai, with each witnessing leasing in the range of 2-3 million sq ft. Office space demand in Hyderabad and Pune more than doubled on an annual basis during Q1 2026. GCC space uptake was firm, accounting for almost half of the overall demand and although global headwinds continue to loom large, the demand-side outlook for 2026 remains positive at this juncture.
Supply, Vacancy, and the Flex Surge
New supply across the top seven cities remained strong at 11.8 million sq ft, up 19% year-on-year in Q1. 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. Four out of seven top office markets witnessed a significant drop in vacancy levels of at least 100 basis points year-on-year during the quarter.
Leasing activity by flex space operators witnessed a notable 77% year-on-year 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. Flex space adoption in cities like Kolkata and Delhi-NCR was notably strong, with at least 40% of quarterly leasing in each of those markets driven by flex operators.
Conventional leasing remains strong at 14.4 million sq ft, with technology firms driving 36% of conventional space uptake. Bengaluru and Mumbai accounted for the majority of space uptake by BFSI firms. In the case of technology firms, Bengaluru and Hyderabad collectively drove more than 60% of demand.
