Key Points

The demand is driven by the leasing needs of Global Capability Centres (GCCs), banking, financial services and insurance (BFSI) institutions, flex-space operators, and domestic Information Technology Business Process Outsourcing (IT-BPO) firms.

Bengaluru, Chennai, Delhi-NCR, Hyderabad, Mumbai Metropolitan Region (MMR), and Pune are the top six office markets in India. The net absorption of commercial office leasing in these cities will sustain record-high levels into FY26, the report from rating agency ICRA said.

"The slowdown in leasing from global IT firms has been compensated handsomely by the GCCs and the BFSI segments. ICRA expects these sectors to continue dominating leasing activity, accounting for most of the space uptake in FY26," the report said

“Net absorption reached a record 65 million square feet (msf) in FY2025 (14 per cent YoY growth), surpassing the 58 msf supply. The momentum continued to Q1 FY2026, with 17 msf of net absorption, closely matching the supply of 17.7 msf," said Abhishek Lahoti, Assistant Vice President and Sector Head, Corporate Ratings, ICRA.

"The vacancy levels are projected to decline further to around 13 to 13.5 per cent by March 2026 from all-time low levels of 13.9 per cent a year before," he added.

As of June 30, 2025, the total grade A office stock in the top six markets stood at around 1,030 msf, with Bengaluru having the highest supply of 26 per cent, followed by Delhi NCR and the Mumbai Metropolitan Region.

MMR and Pune are also anticipated to see vacancy decline, reflecting strong net absorption trends and sustained demand across key markets.

ICRA projected that the credit profile of office players will remain stable due to healthy growth in net operating income (NOI) from higher rentals.

- IANS