India’s office market stays on a growth track in 2026, with a substantial rise in leasing , with Bangalore and Hyderabad accounting for nearly half of the leasing activity. 

According to a latest Colliers report, office market across the top seven cities registered 18.3 million sq ft of leasing activity in the first quarter, up by 15% year-on-year (YoY). This continued momentum has been supported by strengthening occupier demand across sectors and expanding Global Capability Centers (GCCs) footprint, despite ongoing global uncertainties. Bengaluru, followed by Hyderabad, cumulatively contributed 8.7 million sq ft of demand. Meanwhile, Grade A space uptake was firm in cities like Mumbai, Pune, Delhi NCR and Chennai, with each of them witnessing leasing in the range of 2-3 million sq ft. Interestingly, office space demand in Hyderabad and Pune more than doubled on an annual basis during Q1 2026.

Colliers India Office Services Managing  Director,Arpit Mehrotra says that though  global headwinds continue to loom large and can potentially impact completion timelines, demand side outlook for 2026 remains positive at this juncture. “The Indian office market will continue to be one of the best performing markets in the APAC region, supported by long-term GCC expansion, diversification of occupier base, strengthening of flex space offerings and growing preference for high-quality assets,” he says.

Trends in Grade A gross absorption (in million sq ft)

Source: Colliers

New supply across the top seven cities remained strong at 11.8 million sq ft, up 19% YoY in the first quarter of the year. With around 47% share in overall supply additions, Bengaluru drove majority of the quarterly completions, followed distantly by Delhi NCR with a share of 17%. Additionally, Chennai and Mumbai saw completions to the tune of 1.5 million sq ft each, contributing around 13% of the supply additions during Q1 2026.

Trends in Grade A new supply (in million sq ft)

Source: Colliers

Technology firms drive 36% of convential space uptake in Q1 2026 and flex space demand continues

to witnwss sustained growth.

Trends in conventional and flex space leasing (in million sq ft)

Source: Colliers

 Leasing in conventional spaces remained robust at 14.4 million sq ft driven by Technology and BFSI occupiers. These two sectors together drove nearly two-thirds of the conventional space uptake, with 9.5 million sq ft of cumulative leasing during the quarter. While Bengaluru & Mumbai accounted for majority of the space uptake by BFSI firms during the quarter, in case of Technology firms, Bengaluru & Hyderabad collectively drove more than 60% of the demand.

Leasing activity by flex space operators too witnessed a notable 77% YoY increase in Q1 2026 with close to 4 million sq ft of space uptake. Delhi- NCR followed by Hyderabad together drove more than 45% of the flex space leasing. Interestingly, flex space adoption in cities like Kolkata & Delhi NCR was notably strong, with at least 40% of quarterly leasing of respective cities being driven by flex operators. Further, flex operators contributed nearly one-fourth of the quarterly demand in each of the cities like Hyderabad, Chennai & Pune.

Says Vimal Nadar, National Director and Head of Research, Colliers India,“Q1 2026 reaffirms continued strengthening of India’s office market led by tech occupiers and notable traction from a wider occupier base including BFSI, engineering & manufacturing firms etc. Both Technology and BFSI sectors significantly expanded their office footprint, with higher space uptake on an annual basis and cumulatively accounted for two-thirds of conventional office space demand . At the same time, leasing by flex space operators continued to gain momentum, registering close to 4 million sq ft of Grade A space uptake, around 77% higher than the leasing in corresponding quarter of 2025. This reiterates the increased occupier focus on incorporating flex spaces into their portfolios for scalability, cost arbitrage, risk mitigation, and hybrid work enablement.

With demand continuing to outpace new supply consistently, overall vacancy levels dropped by close to 90 basis points on an annual basis, to around 15.3% at the end of Q1 2026. In fact, 4 out of 7 top office markets witnessed significant drop in vacancy levels of at least 100 bps on a YoY basis during the quarter. Meanwhile, average office rentals across the top seven markets firmed up by around 6% YoY.