9-month office space demand at 54.4 msf; Q3 2026 leasing also picks up by 7% on QoQ basis: Colliers India

(MENAFN- seen media) : Office space demand across Indi’’s top seven markets remained firm throughout the first three quarters of 2026, pushing cumulative leasing to 54.4 million sq ft, a 7% Year-on-Year (YoY) rise. The growth momentum continues to be driven by occupier expansion across multiple demand sectors, coupled with strong space uptake from Global Capability Centers (GCCs) and flex space operators. On a quarterly basis, Q3 2026 witnessed 18.7 million sq ft of Grade A demand, a record high for a third quarter in recent years. More importantly, quarterly leasing grew by a notable 7% compared to Q2 2026, demonstrating the resilience of Indian office market even amidst global uncertainties and moderating economic growth prospects.
At the city level, five out of seven cities witnessed an annual rise in gross leasing during the first nine months of 2026. Bengaluru continued to drive office demand, leading space uptake at 15.7 million sq ft, accounting for a 29% share during the nine-month period. Hyderabad followed with 9.4 million sq ft of space uptake during Jan-Sep 2026, reflecting a 47% YoY rise during the same period. Meanwhile, Delhi NCR, Mumbai, Pune & Chennai also witnessed healthy traction, with each of them witnessing leasing to the tune of 6-8 million sq ft during the first nine months of the year.
After a cautious second quarter, at 18.7 million sq ft, Grade A space uptake grew by 7% & 9% on a QoQ and YoY basis respectively during Q3 2026. Bengaluru continued to lead leasing volumes in Q3 at 5.2 million sq ft, followed by Delhi NCR & Pune. In fact, space uptake in Delhi NCR more than doubled to 3.3 million sq ft compared to the corresponding quarter of last year.
“Office space demand in the country has remained remarkably consistent in the first three quarters of 2026, even though a minor blip was evident during Q2 on account of external volatilities. Leasing activity in the third quarter has been particularly noteworthy at 18.7 million sq ft, a record high for Q3 in recent years. With cumulative Grade A space uptake already at 54.4 million sq ft, and demand prospects looking strong in the final quarter, we are well poised for a stronger 2026, wherein we could potentially see 75-80 million sq ft of transactions across the major office markets of the countr”,” said Arpit Mehrotra, Managing Director, Office Services, Colliers India.

Trends in Grade A gross absorption (in million sq. ft.)
CityQ3 2025Q2 2026Q3 2026QoQ change
(Q3 2026 vs Q2 2026)YoY change
(Q3 2026 vs Q3 2025)YTD
(Jan-Sep) 2025YTD
(Jan-Sep) 2026YoY change (YTD 2026 vs YTD 2025)
Bengaluru4.75.25.20%11%14.015.712%
Chennai2.62.02.00%-23%8.16.0-26%
Delhi NCR1.62.73.322%106%7.18.317%
Hyderabad1.53.82.2-42%47%6.49.447%
Kolkata0.10.50.4-20%300%0.81.025%
Mumbai3.02.02.420%-20%8.07.1-11%
Pune3.71.23.2167%-14%6.56.96%
Pan India17.217.418.77%9%50.954.47%
Source: Colliers
Gross absorption does not include lease renewals, pre-commitments and deals where only a letter of Intent has been signed.
Top 7 cities include Bengaluru, Chennai, Delhi NCR, Hyderabad, Kolkata, Mumbai, and Pune

Leasing by flex space operators rise 37% YoY; technology sector leads with 38% share in conventional space uptake
Trends in conventional and flex space leasing (in million sq. ft.)
Q3 2025
(Share in %)Q3 2026 (Share in %)YoY change
(%)YTD 2025
(Share in %)YTD 2026 (Share in %)YoY change
(%)
Conventional leasing (msf)14.5 (84%)14.7 (79%)1%41.7 (82%)41.8 (77%)0.2%
Flex space leasing (msf)2.7 (16%)4.0 (21%)49%9.2 (18%)12.6 (23%)37%
Total (msf)17.218.79%50.954.47%
Source: Colliers
Data pertains to top 7 cities - Bengaluru, Chennai, Delhi NCR, Hyderabad, Kolkata, Mumbai, and Pune

Noteworthily, leasing by flex space operators continued to demonstrate a strong upward growth trajectory and reached 12.6 million sq ft, a strong 37% YoY rise during the first nine months of 2026. Bengaluru & Delhi NCR remained India’s leading flex markets in terms of volume, with each city accounting for 2.8 million sq ft of leasing during the period. Interestingly, five out of the seven office markets witnessed an uptick in leasing by flex space operators on an annual basis during the nine-month period. Delhi NCR & Hyderabad, particularly, witnessed more than 2X times rise in flex space uptake, underscoring the growing prominence of agile workspaces amongst occupiers across demand sectors.
During the first three quarters of 2026, conventional space uptake across the top seven office markets remained steady at 41.8 million sq ft and at par with the levels seen during the same period in 2025. With close to 16 million sq ft of leasing, Technology sector occupiers drove in the bulk of the demand in conventional spaces, followed by BFSI and Engineering & manufacturing firms. These three sectors collectively accounted for nearly three-fourths of the conventional space uptake during Jan-Sep 2026. Bengaluru & Hyderabad continue to be preferred by technology firms, cumulatively accounting for over 55% share in conventional office space demand. Mumbai, meanwhile, continued to dominate BFSI leasing with a share of 30% in conventional space uptake during the nine-month period.
≥100,000 sq ft) doubled in Q3 compared to last year’s corresponding quarter. This reiterates the ongoing shift in occupier preference towards managed & flexible workspace formats. Flex spaces could potentially form 20-25% of occupie’s’ real estate portfolios over the next few years, up from 15-20% curren”ly,” said Vimal Nadar, National Director and Head of Research, Colliers India.

Record completions in Q3, led by Hyderabad & Bengaluru boost new supply to 41.7 msf during Jan-Sep 2026
New supply across the top seven office markets reached 41.7 million sq ft during the first three quarters of 2026, representing a marginal 1% rise on an annual basis. However, in anticipation of upcoming demand traction, developers infused record high supply during Q3 2026. In fact, during Q3 2026, new supply surged to over 19 million sq ft, rising 79% sequentially and marking one of the strongest quarterly supply additions in recent years. With 6.7 million sq ft, Hyderabad drove majority of the quarterly supply additions, accounting for 35% share, followed by Bengaluru t 28%.
Noteworthily in the nine-month period, Bengaluru saw 14.1 million sq ft of new supply, driving about one-third of the completions in 2026, followed by Hyderabad & Pune.

Trends in Grade A new supply (in million sq. ft.)
CityQ3 2025Q2 2026Q3 2026QoQ change
(Q3 2026 vs Q2 2026)YoY change
(Q3 2026 vs Q3 2025)YTD (Jan-Sep) 2025YTD (Jan-Sep) 2026YoY change (YTD 2026 vs YTD 2025)
Bengaluru4.03.25.469%35%11.814.119%
Chennai2.30.41.3225%-43%3.83.2-16%
Delhi NCR3.12.31.1-52%-65%6.95.4-22%
Hyderabad1.11.36.7415%509%4.98.063%
Kolkata---*NA*NA0.1--100%
Mumbai1.52.10.8-62%-47%3.54.426%
Pune4.61.43.9179%-15%10.46.6-37%
Pan India16.610.719.279%16%41.441.71%
Source: Colliers
Top 7 cities include Bengaluru, Chennai, Delhi NCR, Hyderabad, Kolkata, Mumbai, and Pune
*NA-Not applicable as supply additions were limited in Kolkata in Q3 2025 and Jan-Sep 2026

Vacancy levels touch 16%; average rentals in most office markets on an upswing
Overall vacancy levels stood at around 16% at the end of Q3 2026. Although this is marginally lower than levels seen during Q3 of last year, it inched up on a quarterly basis owing to record high supply additions and churns. Meanwhile, average rentals across high-activity micro markets of most cities continued to grow driven by sustained demand for superior, green-certified developments. Consequently, average rentals across the top seven office markets surged by 7% YoY during Q3 2026.
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