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India office net absorption falls 18% to 14.1 million sq ft in Q3 2026: Report

In the third quarter of 2026, net office absorption across India's eight key cities dropped to 14.1 million sq ft, with Hyderabad and Bengaluru leading the way in significant uptake. The gross leasing volume peaked at around 22 million sq ft, marking the highest for 2026 to date. Global capability centres notably influenced leasing trends, predominantly within the IT and BFSI sectors. The national vacancy rate registered at 14.

Year-to-date net absorption stood at 36.7 million sq ft.

Hyderabad led quarterly absorption with 4.1 million sq ft, accounting for 29% of the pan-India total, followed by Bengaluru with 4.02 million sq ft, or 28.6%.

Gross leasing volume across the top eight cities stood at approximately 22 million sq ft in Q3 2026.

Bengaluru led leasing activity with 5.2 million sq ft, followed by Hyderabad at 4.2 million sq ft, Mumbai at 3.9 million sq ft and Delhi-NCR at 3.8 million sq ft.

During January-September 2026, gross leasing reached 64.6 million sq ft, the highest volume recorded for the first nine months of any year.

Fresh leasing accounted for around 75% of year-to-date activity, while pre-commitments contributed about 12%.

Global capability centres leased 9.1 million sq ft during Q3, accounting for 42% of total leasing activity. For the first nine months of 2026, GCC leasing stood at 25.3 million sq ft, representing 39% of overall leasing.

BFSI was the largest demand driver in Q3 with a 24% share, followed by IT-BPM at 22%. BFSI leasing during January-September stood at 13.2 million sq ft, up 34% year-on-year, while flexible workspace operators recorded 11.9 million sq ft of leasing, up 42% year-on-year.

New office completions reached an all-time quarterly high of 22.7 million sq ft in Q3 2026. Year-to-date office supply stood at 43.3 million sq ft, equivalent to 82% of the total supply added during 2025.

Pan-India vacancy stood at 14.37%, while average office rents increased across major markets.