India office vacancy slips to 13.8 pc in Q1 amid surging demand

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Office vacancy across India's top eight cities averaged 13.85 per cent in Q1 2026, slipping below the 14 per cent threshold for the first time since the pandemic driven by sustained occupier demand and a sharp moderation in new supply, a report said on Wednesday.

The report from commercial real estate services firm Cushman; Wakefield said vacancy declined by about 48 basis points quarter‑on‑quarter and around 191 basis points year‑on‑year in Q1 2026. It also marked the eleventh consecutive quarter of compression.

New completions across the top eight cities stood at 8.8 million square feet (MSF), down 43 per cent QoQ and 18 per cent YoY, largely due to delays in project completions, the report said.

Notably, Bengaluru (35 per cent), Delhi NCR (25 per cent) and Chennai (18 per cent) accounted for the bulk of new supply, while Pune, Hyderabad and Kolkata recorded no completions, resulting in faster absorption of available vacant stock across several established office locations.

Net absorption stood at 11.51 MSF in Q1 2026, reflecting a 28 per cent QoQ and 24 per cent YoY decline. The moderation was largely on account of softer fresh leasing following a strong end to 2025, along with slower supply completions, which limited the physical realisation of pre‑committed demand during the quarter.

"Gross leasing volume stood at around 22 MSF in Q1 2026, a 13 per cent increase over the same period last year, reflecting a robust demand across sectors," said Anshul Jain, Chief Executive - India, SEA, MEA & APAC Office and Retail, Cushman; Wakefield,

Global Capability Centres, accounting for around 40 per cent of take up remain a key driver, reinforcing India's role in long-term portfolio strategies, Jain added.

The firm forecasted around 61 MSF of new supply to come into the market in 2026, dominated by premium Grade A+ stocks, leading to ease in vacancy levels. However, strong absorption and pre-commitment trends are likely to keep overall vacancy broadly stable, even as rental momentum remains firm, Jain said.

Bengaluru continued to operate at sub‑8 per cent vacancy (7.81 per cent) in Q1 2026, with select micro‑markets witnessing vacancy levels as low as 2 per cent.

Mumbai moved into single‑digit vacancy at around 9 per cent and prime business districts below 3 per cent. Other markets within the top eight cities, including Chennai, Pune and Kolkata, also continued to see a reduction in vacancy rate during the quarter.

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