India’s office market defies global headwinds with record-breaking 21.5 million sq. ft. leased in Q1 2026

• The tech sector emerges as the biggest contributor during the first quarter (Q1) of 2026 with a 29.1% share, followed by flex with 25.9% and BFSI with 20.0%.
• Strong pre-commitment activity in Q1 2026 underpins a strong Y-o-Y growth in gross leasing for the cities of Mumbai, Bengaluru and Hyderabad.
• Bengaluru remained the top-performing office destination, supported by the continued interest of global firms with the city taking a 33% share of all leasing activity by foreign occupiers in Q1.
• Bengaluru continued to dominate the quarterly leasing activity with a share of 24.8%, followed by Mumbai with 19.5% share, Hyderabad with 16.8% share, Pune with 14.5% share and Delhi NCR with 14.2% share. 
• Reaching a record high for a first quarter, India’s net absorption hit 13.7 million sq. ft in Q1 2026, driven by Bengaluru (36.0%), Hyderabad (22.6%), Mumbai (12.0%), and Delhi NCR (10.7%), with all cities except Delhi NCR showing year-over-year improvement.
• Global occupiers continued to drive market momentum with GCCs commanding a lion’s share even as domestic firms were driven by another strong performance by flex in the quarter.

MUMBAI, 27 APRIL 2026: India’s office market activity continues to break new ground despite geopolitical and anticipated AI-driven disruption headwinds for the sector, with gross leasing hitting 21.5 million sq. ft, the highest ever for any first quarter period across years. Global Capability Centres (GCCs) and flex have emerged as the biggest drivers of office demand, with respective shares of 45.5% and 25.9% in the first quarter of 2026.At a city level, Bengaluru led with 24.8% share of the Q1 leasing volumes, followed by Mumbai with 19.5% and Hyderabad with 16.8%. Pune had a healthy 14.5% share with Delhi NCR following at a 14.2% share.

GCCs were the major driver of leasing activity in the cities of Bengaluru, Chennai, Hyderabad, and Mumbai in Q1 2026. Bengaluru, in fact, saw GCCs account for a 70% share of the quarterly gross leasing activity in the city (the strongest in two years), showcasing the inherent strength of Bengaluru in retaining its status as the frontrunner for the setting up of strategic hubs by global firms. Mumbai saw GCCs command a 46.3% share in the gross leasing volumes, while Hyderabad saw a 42.9% contribution to its quarterly leasing volumes from GCCs. Cities like Pune saw Flex steal a march with a 54.8% share of the city's leasing volumes in Q1, and in Delhi NCR as well, Flex was the leading occupier segment with a 32.9% share.

“India’s office market has delivered its strongest-ever first quarter with 21.5 million sq. ft. of gross leasing, a 10.2% year-on-year increase that demonstrates remarkable resilience despite global headwinds. This growth is being driven by a fundamental transformation in how global enterprises leverage India, with GCCs expanding their footprint by 43% year-on-year to 10 million sq. ft. and now commanding 45.5% of total leasing activity. These are not traditional back-office operations, they are strategic innovation hubs focused on AI development, digital engineering, and core product development. Market fundamentals continue to strengthen, with pan-India vacancy dropping to a five-year low of 14.7% and net absorption reaching a record 13.7 million sq. ft. for the quarter,” said Rahul Arora, Head - Office Leasing & Retail Services, Senior Managing Director (Karnataka, Kerala), India, JLL.

“Bengaluru has been the standout performer, capturing 24.8% of national leasing volumes with an exceptional 70% GCC share—the highest concentration in two years. The city's 52% surge in net absorption to 4.9 million sq. ft., representing 36% of India's total, underscores its position as the undisputed destination of choice for global firms establishing strategic command centers. With nearly 200 new GCCs established across India between 2024 and 2025, and current deal pipelines indicating momentum toward the 100 million sq. ft. annual milestone over the next two years, we're witnessing India's evolution from cost center to innovation epicenter, with Bengaluru firmly at the forefront of this multi-year growth trajectory,” he added.

Flex, as a key strategic lever for portfolio management and optimization for both global and domestic firms, continues to build on its record-breaking performance in 2025 with another strong quarter of expansion in Q1. It leased 5.56 million sq. ft. across the top seven cities in Q1 2026, which is higher than the quarterly space take-up average by flex in the previous year.

Source: Real Estate Intelligence Service (REIS), JLL Research

India’s unequivocal status as “office to the world” is supported by GCCs continuing to ramp up their market activity share in Q1 2026; domestic corporate activity is driven by flex.

GCCs demonstrated accelerating momentum in quarterly leasing activity, with their share expanding to 45.5% in Q1 2026, underscoring their continued dominant role in driving office space demand in India. In absolute terms, GCCs leased approximately 9.8 million sq. ft. in Q1 2026, up by 43.0% y-o-y. Within GCCs, tech and BFSI dominated the leasing activity, followed by the manufacturing segment during the quarter. Overall, global-headquartered firms continued to command a lion's share of the India office leasing landscape with a 57.0% share in Q1 2026, mostly in line with their previous year average. Domestic occupier activity was driven by indigenous flex operators who held a dominant 57.8% share of the total space leased by domestic firms during the quarter. Domestic tech firms continue to expand as they re-engineer their service offerings to drive upstream value creation with prolific use of AI to create customized, long-term, and strategic outcomes for their clients.

In absolute terms, the BFSI and IT/ITeS sectors both witnessed quarter-on-quarter growth. Notably, the BFSI sector recorded its highest quarterly leasing volume ever, driven by sizeable space take-ups and pre-commitment activity during the quarter.

Source: Real Estate Intelligence Service (REIS), JLL Research

India’s net absorption in Q1 2026 was also the highest in the first quarter across any year at 13.7 million sq. ft and was led by Bengaluru with a 36.0% share. Net absorption in Bengaluru was propelled by robust pre-commitments in newly operational projects, with approximately 54% of total net absorption stemming from the conversion of these pre-leased commitments during the quarter. Bengaluru was followed by Hyderabad with a 22.6% share with Mumbai and Delhi NCR next with 12.0% and 10.7% shares, respectively. All cities’, barring Delhi NCR has recorded improved net absorption compared to Q1 2025. 

Source: Real Estate Intelligence Service (REIS), JLL Research

With lower new completions and sustained net absorption during the quarter, the Pan India vacancy further declined to a five-year low of 14.7%, down by 50 bps q-o-q. The core sub-markets across cities continued to witness single digit vacancies. In fact, vacancy is at a historic low in Mumbai over the last 16 years and in Delhi NCR over the past fifteen. The current vacancy in Kolkata is also at a 17-year low and in case of Hyderabad with robust space take-up has now fallen to a two-year low.

India's office market poised for historic growth: Structural advantages to drive multi-year expansion despite an uncertain larger geopolitical environment.

India's office sector continues to demonstrate resilience amid global disruptions, underpinned by structural advantages that position the country as the strategic epicenter for international business operations. The convergence of India's deep talent pool, robust innovation ecosystem, and competitive cost structure has elevated global offshoring centers beyond traditional back-office functions into digital and engineering command centers that drive core product development and organizational strategy.

Sustained headcount growth, combined with real estate footprint expansion and tightening occupancy rates in existing portfolios, creates a powerful catalyst for continued market momentum. Current deal pipelines and leasing velocity indicate India's office market is on track to potentially reach the 100 million sq. ft. milestone over the next two years, representing a landmark achievement for the sector.

GCC demand remains particularly robust, with 200 new centers established between 2024 and 2025. These centers now represent approximately 50% of all active space requirements, driven by international banking and financial services firms establishing offshore operational hubs, complemented by manufacturing sector dynamism fostered through strategic policy initiatives. Critically, GCCs are leveraging India's expertise in AI, data science, and digital engineering to develop proprietary products, build advanced analytics platforms, and automate global operations—demonstrating that India's value proposition extends well beyond labor arbitrage into genuine innovation leadership.

Tightening vacancy rates within core assets and submarkets signal robust appetite for business expansion, while institutional-backed quality supply ensures infrastructure keeps pace with demand. India's evolution from cost center to innovation hub—where strategic decisions are made, intellectual property is created, and digital transformation is architected—establishes a sustainable, multi-year growth trajectory that transcends cyclical headwinds and positions the market for continued outperformance on the global stage.

*Gross leasing refers to all lease transactions recorded during the period, including confirmed pre-commitments, but does not include term renewals. Deals in the discussion stage are not included.

**Net absorption is calculated as the new floor space occupies less floor space vacated. Floor space that is pre-committed is not considered to be absorbed until it is physically occupied.

JLL is India’s premier and largest professional services firm specialising in real estate. The Firm has grown from strength to strength in India for the past two decades. JLL India has an extensive presence across ten major cities (Mumbai, Delhi NCR, Bengaluru, Pune, Chennai, Hyderabad, Kolkata, Ahmedabad, Kochi, and Coimbatore) and over 130 tier-II and III markets with a cumulative strength of over 16,900 employees. The Firm provides investors, developers, local corporates, and multinational companies with a comprehensive range of services. These include leasing, capital markets, project development, facility management, property management, transaction management and research advisory. These services cover various asset classes such as commercial, industrial, warehouse and logistics, data centres, residential, retail, hospitality, healthcare, senior living, and education. For further information, please visit https://www.jll.com/en-in/