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India Office Vacancy Drops Below 14% as Demand Outpaces New Supply

Office vacancy across India's top eight cities averaged 13.85% in the first quarter of 2026, slipping below the 14% mark for the first time since the pandemic. The decline was driven by sustained occupier demand and a sharp 43% quarterly drop in new supply completions. Bengaluru led with a remarkably low vacancy rate of 7.81%, while Mumbai entered single-digit vacancy territory. Despite a forecast of 61 million square feet of new supply in 2026, strong absorption trends are expected to keep overall vacancy stable.

Key Points: India Office Vacancy Falls to 13.8% in Q1 2026

  • Vacancy below 14% for first time since pandemic
  • New supply drops 43% quarter-on-quarter
  • Bengaluru vacancy at sub-8% levels
  • Global Capability Centres drive 40% of demand
2 min read

India office vacancy slips to 13.8 pc in Q1 amid surging demand

Office vacancy in India's top 8 cities drops to 13.85% in Q1 2026, driven by strong demand and a sharp decline in new project completions.

"Gross leasing volume stood at around 22 MSF... reflecting a robust demand across sectors - Anshul Jain, Cushman & Wakefield"

New Delhi, April 15

Office vacancy across India's top eight cities averaged 13.85 per cent in Q1 2026, slipping below the 14 per cent threshold for the first time since the pandemic driven by sustained occupier demand and a sharp moderation in new supply, a report said on Wednesday.

The report from commercial real estate services firm Cushman & Wakefield said vacancy declined by about 48 basis points quarter‑on‑quarter and around 191 basis points year‑on‑year in Q1 2026. It also marked the eleventh consecutive quarter of compression.

New completions across the top eight cities stood at 8.8 million square feet (MSF), down 43 per cent QoQ and 18 per cent YoY, largely due to delays in project completions, the report said.

Notably, Bengaluru (35 per cent), Delhi NCR (25 per cent) and Chennai (18 per cent) accounted for the bulk of new supply, while Pune, Hyderabad and Kolkata recorded no completions, resulting in faster absorption of available vacant stock across several established office locations.

Net absorption stood at 11.51 MSF in Q1 2026, reflecting a 28 per cent QoQ and 24 per cent YoY decline. The moderation was largely on account of softer fresh leasing following a strong end to 2025, along with slower supply completions, which limited the physical realisation of pre‑committed demand during the quarter.

"Gross leasing volume stood at around 22 MSF in Q1 2026, a 13 per cent increase over the same period last year, reflecting a robust demand across sectors," said Anshul Jain, Chief Executive - India, SEA, MEA & APAC Office and Retail, Cushman & Wakefield,

Global Capability Centres, accounting for around 40 per cent of take up remain a key driver, reinforcing India's role in long-term portfolio strategies, Jain added.

The firm forecasted around 61 MSF of new supply to come into the market in 2026, dominated by premium Grade A+ stocks, leading to ease in vacancy levels. However, strong absorption and pre-commitment trends are likely to keep overall vacancy broadly stable, even as rental momentum remains firm, Jain said.

Bengaluru continued to operate at sub‑8 per cent vacancy (7.81 per cent) in Q1 2026, with select micro‑markets witnessing vacancy levels as low as 2 per cent.

Mumbai moved into single‑digit vacancy at around 9 per cent and prime business districts below 3 per cent. Other markets within the top eight cities, including Chennai, Pune and Kolkata, also continued to see a reduction in vacancy rate during the quarter.

- IANS

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Reader Comments

S
Sarah B
Interesting data. While the headline number looks positive, the 28% QoQ decline in net absorption is a bit concerning. Is this the start of a slowdown, or just a quarterly blip after a strong 2025? Hope the forecasted 61 MSF supply doesn't overshoot demand later.
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Priya S
As someone working in Hyderabad's tech corridor, it's no surprise we had zero new completions. Finding good office space here is becoming a challenge for companies looking to expand. Rents are surely going to rise further.
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Rohit P
Good to see Delhi NCR contributing 25% of new supply. The infrastructure improvements around the airport and expressways are finally attracting premium developments. Hope this creates more job opportunities in the NCR region.
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Karthik V
The report mentions "delays in project completions" for the low new supply. This is a persistent issue. Authorities need to streamline approvals to ensure timely delivery of commercial projects, especially in growing cities like Pune and Hyderabad.
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Meera T
Mumbai in single-digit vacancy is a big deal! Prime areas below 3%... wow. Shows the enduring strength of our financial capital. But with such low vacancy, where will new businesses set up shop? Might push some to look at emerging locations like Navi Mumbai or Thane.

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