Bengaluru leads India's office leasing market, vacancy drops to decade low

Bengaluru, Aug 8 (PTI) Bengaluru has emerged as the frontrunner in India’s commercial office market, with record leasing activity pushing vacancy levels to a decade low, according to Investment Information and Credit Rating Agency (ICRA).

As of June 30, the total Grade A office stock across the top six cities stood at approximately 1,030 msf, with Bengaluru commanding the largest share at 26 per cent, followed by Delhi-NCR with 19 per cent and the Mumbai Metropolitan Region (MMR) with 18 per cent, stated a press release issued by ICRA on Friday.

The IT hub is expected to see vacancy ease further from 9.8 per cent to 9.0–9.5 per cent in FY2026, said ICRA.

Beyond Bengaluru, Chennai is expected to maintain stable vacancy levels at 9.0–9.5% per cent with approximately 5 million square feet (msf) of new additions.

Delhi-NCR is projected to witness a slight improvement, with vacancy levels easing from 22.4 per cent to 21.5–22 per cent, alongside 12 msf of supply.

Hyderabad is expected to remain steady with a vacancy range of 17.5–18 per cent and 15.5 million square feet of new space.

MMR and Pune are also anticipated to register a decline in vacancy rates, reflecting continued demand and robust net absorption across key markets.

ICRA expects this trend to persist through March 2026, supported by consistent demand from Global Capability Centres (GCCs), Banking, Financial Services and Insurance (BFSI) institutions, flex-space operators, and domestic IT-BPM firms, Abhishek Lahoti, Assistant Vice President and Sector Head, Corporate Ratings, ICRA, is quoted as saying.

The projected new supply for FY2026 in India is estimated at around 63–64 msf. PTI JR ROH