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India Office Vacancy Falls Below 14% Mark

2026-04-16

India’s office real estate market recently sustained strong momentum, with vacancy levels tightening to 13.85 per cent in Q1 2026, according to Cushman & Wakefield. This marks a decline of 48 basis points quarter-on-quarter and 191 basis points year-on-year, pushing vacancy below 14 per cent for the first time since the pandemic.

Bengaluru continued to record sub-8 per cent vacancy, with select micro-markets at nearly 2 per cent, while Mumbai entered single-digit vacancy at around 9 per cent, with prime districts below 3 per cent. Chennai, Pune and Kolkata also reported declining vacancy levels.

The trend was supported by reduced supply, with new completions at 8.8 million sq ft—down 43 per cent QoQ and 18 per cent YoY—due to project delays. Limited supply alongside steady leasing activity accelerated absorption across key markets.

Rental growth strengthened, with average rents crossing Rs 100 per sq ft per month for the first time. Hyderabad led with 12 per cent YoY growth, followed by Delhi NCR at 10 per cent, and Mumbai and Chennai at around 6 per cent.

Gross leasing volume reached 22 million sq ft, up 13 per cent YoY, led by Mumbai at 6.6 million sq ft. Global Capability Centres remained a key driver, accounting for nearly 40 per cent of leasing activity.

Despite a dip in net absorption to 11.51 million sq ft, demand fundamentals remain resilient, with landlords likely to retain pricing power amid constrained high-quality supply."

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