Mumbai: The Indian office real estate market recorded a net absorption of 42.9 million sq ft in the first nine months of 2026, up 2% Y-o-Y from 42 million sq ft in the corresponding period of 2025, finds latest data by Anarock Research & Advisory. While overall absorption remained stable, coworking and banking, financial services and insurance (BFSI) increased their share of leasing, with these two segments accounting for 47% of total office demand in 9M 2026, up from 41% a year earlier.
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New office completions in the top 7 cities increased 5% y-o-y to 41.1 million sq ft in 9M 2026 from 39.21 million sq ft in 9M 2025. Hyderabad and Bengaluru were the strongest growth markets in 9M 2026, recording increases in both net absorption and new office completions.
MMR records stable absorption at 6.65 million sq ft
Hyderabad’s net absorption rose 54% YoY to 8.8 million sq ft in 9M 2026 from 5.7 million sq. ft. a year ago, while new completions increased 63% to 9.6 million sq ft this year from 5.9 million sq ft. The city also recorded the highest rental growth among the top 7 cities, with average office rentals rising 12% to INR 77 per sq ft per month. Its vacancy rate declined from 26.5% to 24%, although it remained the highest among the major cities
Bengaluru retained its position as the largest office market by net absorption, recording 11.92 million sq ft, up 20% from 9.95 million sq ft in 9M 2025. New completions rose 19% to 12.35 million sq ft. Average rentals increased 9% to INR 109 per sq. ft. per month, while vacancy declined from 12.2% to 11%.
While Mumbai Metropolitan Region (MMR) recorded largely stable absorption at 6.65 million sq ft, compared with 6.6 million sq ft a year earlier. Completions increased 21% to 4.1 million sq ft. The market continued to command the highest average rentals at INR 156 per sq ft per month, up 8% Y-o-Y, while vacancy declined from 14.9% to 13.3%.
Absorption moderates in Delhi NCR, Pune & Chennai
NCR recorded net absorption of 7.32 million sq. ft., down 11% y-o-y from 8.2 million sq. ft in 9M 2025. New completions declined 25% to 5.05 million sq. ft. from 6.7 million sq. ft. Despite the moderation in leasing activity, average rentals increased 10% to INR 98 per sq. ft. per month. Vacancy fell from 22% to 20.6%, though NCR continued to have the highest vacancy rate after Hyderabad.
While Pune saw net absorption decline 36% to 3.95 million sq. ft. from 6.2 million sq. ft., while new completions also fell 36% to 5.9 million sq. ft. Average rentals rose 6% to INR 91 per sq. ft. per month, and vacancy edged down from 11.85% to 11.6%.
Chennai saw absorption decline by 21% to 3.56 million sq. ft., even as new completions increased 9% to 3.8 million sq. ft. Average rentals rose 6% to INR 83 per sq. ft. per month, while vacancy remained relatively stable at 8.75%, compared with 8.9% in 9M 2025.
While Kolkata recorded absorption of 0.7 million sq. ft., down 18% YoY, while completions rose to 0.3 million sq. ft from 0.1 million sq. ft. a year ago. Average rentals increased 6% to INR 66 per sq. ft. per month, and vacancy declined from 17.8% to 16.8%.
Peush Jain, Managing Director - Commercial Leasing & Advisory, ANAROCK Group, says, "Coworking has overtaken IT/ITeS office space demand - at 26%, it now commands the highest overall leasing share in 9M 2026, followed closely by IT/ITeS with a 25% share and BFSI with 21%."
Falling Vacancy, Rising Rentals
The pan-India office vacancy rate declined to 15.15% in 9M 2026 from 16.2% a year earlier. All seven cities recorded lower vacancy, indicating an improvement in overall occupancy conditions despite differences in absorption and supply additions.
'The combination of lower vacancy and higher rentals points to improving market conditions at the national level. However, the differentiated performance of individual markets - strong absorption growth in Hyderabad and Bengaluru and softer activity in NCR, Pune, and Chennai - is notable,” Jain added.
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