India Office Absorption Climbs 26% in Q3 as New Supply Reaches Record
Net office absorption in India's top eight cities reached 14.1 million square feet in Q3 2026, driven by Bengaluru and Hyderabad, even as new completions surged.
India's Office Market Sees Strong Q3 Demand
India's office sector recorded net absorption of 14.1 million square feet (MSF) across its eight largest cities in the third quarter of 2026, marking a 26% increase quarter-on-quarter, according to Cushman & Wakefield’s Q3 2026 Office MarketBeat report. Gross Leasing Volume (GLV) for the quarter stood at 21.9 MSF, a 3% rise from the previous quarter.
Year-to-date (YTD) leasing for the first nine months of 2026 reached 64.6 MSF, setting a new record for this period. Hyderabad led net absorption with 4.1 MSF, accounting for 29% of the national total, its strongest quarterly performance since Q4 2021. Bengaluru followed closely with 4.02 MSF, contributing 28.6%.
Record Supply Boosts Vacancy, Rents Still Climb
New office completions hit an all-time quarterly high of 22.7 MSF in Q3, nearly doubling from the previous quarter. Bengaluru contributed 43% of these additions, with Hyderabad providing another 38%. YTD supply reached 43.3 MSF, equivalent to 82% of the total supply added in 2025, positioning 2026 to become the highest-supply year on record.
This surge in new space led to a 63 basis points (bps) quarter-on-quarter increase in pan-India vacancy, reaching 14.37%. This marks the first rise after twelve consecutive quarters of compression. Despite the higher vacancy, pan-India office rents increased 2% quarter-on-quarter across most major markets.
GCCs and BFSI Drive Leasing Activity
Global Capability Centres (GCCs) remained a significant source of office demand, leasing 9.1 MSF during Q3 and accounting for 42% of the total quarterly GLV. Bengaluru and Pune showed particularly high GCC concentration, with this segment contributing around 65% of leasing activity in each market. YTD GCC leasing reached 25.3 MSF, making up 39% of total leasing.
Financial Services, Banking, and Insurance (BFSI) emerged as the largest sectoral demand driver in Q3, representing 24% of total leasing, followed by IT-BPM at 22%. Flexible workspace operators also expanded, leasing 3.5 MSF in Q3, which accounted for 16% of quarterly GLV.
The sustained demand for quality office space, even with record new supply, reflects the underlying strength of India's office market, according to Anshul Jain, Chief Executive – India, SEA, MEA & APAC Office and Retail at Cushman & Wakefield. Occupiers are increasingly using pre-commitments, which rose to approximately 12%, to secure prime space ahead of project completions.
This indicates a strategic approach to future needs. For developers, the slight rise in vacancy, despite rental growth, suggests that new projects must closely align with specific demand pockets, particularly those driven by GCCs and BFSI firms in key cities like Bengaluru and Hyderabad. The market is on track for another strong year, with YTD leasing already at 74% of 2025’s full-year volume.
This article is journalism, not investment advice; consult a licensed professional before making financial decisions. Market data is indicative, may be delayed, and should be verified with your broker or exchange before use.
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