Indian Office Leasing soars to a new high; Bengaluru most Popular amongst Investors.

Amongst tier I Indian cities, Bengaluru, with 9.2 million square feet of office space leasing, recorded the highest office leasing activity in the first quarter of the year. Followed by Hyderabad (5.9 million sq ft.), Mumbai (5.6 million sq ft.), and the National Capital Region (4.0 million sq ft.).

Are premium office spaces in demand from investors in India?

 “Notably, transaction volumes in Mumbai and Hyderabad during the quarter exceeded 50% of their total leasing activity for 2025, underscoring the strength and concentration of demand. The quarter also stood out for the scale of transactions, with four large deals, each exceeding 1.0 million sq.ft., concluded across NCR, Bengaluru, Mumbai, and Hyderabad, highlighting sustained occupier confidence and the growing preference for large-format spaces,” the report said.

The office leasing activity in India reflects a high demand for premium office spaces in India. These transactions hold 93% of total leasing activity. While Pune contributed (3.1 million sq. ft.), Chennai (1.5 million sq. ft.), followed by contributions from Ahmedabad and Kolkata (0.3 million sq. ft.) and (0.4 million sq ft.) respectively.

Are Global Capability Centers dominating Demand for Office Property in India?

GCCs (Global Capability Centers) record 48 percent office space absorption with 14.4 million sq.ft, a major share. Interestingly, Bengaluru takes the lead here also with 41% transactions. Thus, identifying as the epicentre for global investors in Commercial real estate in India.

In Q1, 2026, GCC's business expansion positions Bengaluru at the first position with 5.9 million sq.ft. Mumbai (2.9 million sq. ft.) stands second, Hyderabad comes third with 2.5 million sq.ft. Following these cities are the National Capital Region (1.3 million sq. ft.), Pune (1.0 million sq. ft.), and Chennai (0.7 million sq. ft.).

Viral Desai, Senior Executive Director, Occupier Strategy and Solutions, Industrial and Logistics, Capital Markets and Tenant, Knight Frank India said, “India’s office market continues to be driven by strong occupier demand, Global Capability Centers (GCCs) and India-facing businesses. The strong growth in GCCs and India-facing businesses reflects a structural shift, where India is increasingly being positioned as a core operating market rather than a peripheral one.”

In the first quarter, 14 million sq ft. of office space was delivered in the top eight Indian cities, which scores 154% YoY increase. The Knight Frank India reports, “The persistent gap between supply and demand, evident since 2021, has steadily tightened market conditions. Vacancy levels have compressed from 17.2% in 2021 to a considerably lower 13.9% in Q1, 2026.”

Office Space Rental Soars in Top Indian Cities

With the slowdown of the supply chain, office space rental values have witnessed an increase since 2022. In top Indian cities, rental values for commercial spaces rose between 2% and 15% YoY basis during Q1, 2026.

Interestingly, Kolkata and NCR witness growth of 15%, Hyderabad and Chennai recorded a rise of 8 percent in rental value.

Shishir Baijal, International Partner, Chairman and Managing Director, Knight Frank India said, “Office leasing activity remains well distributed across markets, reflecting sustained occupier confidence in India’s growing strategic relevance in an evolving global landscape.”

“The continued expansion of Global Capability Centers (GCCs), alongside the strengthening of institutional-grade supply, reinforces India’s position as a key hub for global occupiers. While, near-term uncertainties may influence decision-making timelines, India’s underlying stability and structural growth drivers are expected to sustain leasing momentum and support a positive medium-term outlook for the office market.”