India’s office market recorded net absorption of 42.9 million sq. ft across the top seven cities in the first nine months of 2026, marking a 2% year-on-year increase from 42 million sq. ft in the corresponding period last year. Coworking operators emerged as the largest occupier segment, accounting for 26% of total office leasing, ahead of IT/ITeS at 25% and banking, financial services and insurance (BFSI) at 21%, according to Anarock Research & Advisory.
The data points to a gradual shift in occupier demand, with flexible workspace providers and financial services companies expanding their share of office leasing. Coworking’s share increased from 23% in the first nine months of 2025, while BFSI’s share rose from 18%. In contrast, IT/ITeS accounted for 25% of leasing, down from 29% a year earlier.
Together, coworking and BFSI contributed 47% of total office demand during January-September 2026, compared with 41% in the corresponding period of 2025.
Peush Jain, Managing Director, Commercial Leasing & Advisory, ANAROCK Group, said coworking had overtaken IT/ITeS to become the largest occupier segment, reflecting the growing importance of flexible workspace formats in corporate real estate strategies.
Manufacturing and industrial occupiers accounted for 15% of office demand, compared with 14% a year earlier. Consultancy firms’ share declined from 8% to 6%, while e-commerce remained unchanged at 4%. Miscellaneous sectors accounted for the remaining 3%.
Bengaluru and Hyderabad Lead Office Absorption
Bengaluru retained its position as the largest office market by net absorption, recording 11.92 million sq. ft in the first nine months of 2026, up 20% from 9.95 million sq. ft a year earlier.
Hyderabad recorded the strongest annual growth among the seven markets, with net absorption rising 54% to 8.8 million sq. ft from 5.7 million sq. ft in the corresponding period last year.
The Mumbai Metropolitan Region (MMR) recorded largely stable absorption at 6.65 million sq. ft, compared with 6.6 million sq. ft a year earlier. The National Capital Region (NCR) recorded 7.32 million sq. ft, down 11% from 8.2 million sq. ft.
Pune’s net absorption declined 36% to 3.95 million sq. ft, while Chennai recorded a 21% fall to 3.56 million sq. ft. Kolkata’s absorption decreased 18% to 0.7 million sq. ft.
New Office Supply Rises 5%
New office completions across the top seven cities increased 5% year-on-year to approximately 41.1 million sq. ft in the first nine months of 2026, compared with 39.21 million sq. ft in the same period last year.
Bengaluru recorded the highest new supply at 12.35 million sq. ft, up 19% from 10.41 million sq. ft. Hyderabad followed with 9.6 million sq. ft, marking a 63% increase from 5.9 million sq. ft a year earlier.
New completions in MMR rose 21% to 4.1 million sq. ft, while Chennai recorded a 9% increase to 3.8 million sq. ft. In contrast, supply declined 25% in NCR to 5.05 million sq. ft and 36% in Pune to 5.9 million sq. ft. Kolkata recorded 0.3 million sq. ft of new completions, compared with 0.1 million sq. ft in the corresponding period last year.
The increase in supply in Bengaluru and Hyderabad coincided with stronger absorption, indicating sustained leasing activity in both markets. However, the divergence across other cities highlights differences in occupier demand and construction activity.
Vacancy Falls as Office Rentals Increase
The overall office vacancy rate across the seven cities declined to 15.15% in the first nine months of 2026, from 16.2% a year earlier, a reduction of 105 basis points.
Chennai recorded the lowest vacancy rate at 8.75%, followed by Bengaluru at 11% and Pune at 11.6%. MMR’s vacancy rate fell to 13.3% from 14.9%, while Kolkata recorded a decline to 16.8% from 17.8%.
Hyderabad’s vacancy rate decreased from 26.5% to 24%, although it remained the highest among the seven markets. NCR’s vacancy fell from 22% to 20.6%.
Average monthly office rentals increased 8% across the markets, rising to Rs. 97 per sq. ft from Rs. 90 per sq. ft in the first nine months of 2025.
Hyderabad recorded the highest rental growth at 12%, with average rents reaching Rs. 77 per sq. ft per month. NCR followed with a 10% increase to Rs. 98 per sq. ft, while Bengaluru’s rentals rose 9% to Rs. 109 per sq. ft. MMR remained the most expensive market, with average monthly rentals increasing 8% to Rs. 156 per sq. ft.
Chennai, Pune and Kolkata each recorded rental growth of 6%, taking average rents to Rs. 83, Rs. 91 and Rs. 66 per sq. ft per month, respectively.
The combination of higher leasing activity, declining vacancy and rising rentals indicates continued resilience in India’s office market. However, with absorption weakening in NCR, Pune and Chennai, market performance will depend on how effectively upcoming supply is matched by occupier demand across individual cities.
