India’s eight leading office markets recorded 14.1 million sq ft of net absorption during the July–September quarter of 2026, according to Cushman & Wakefield’s Q3 Office MarketBeat findings reported over the weekend.
The figure represented a 26% increase from the preceding quarter but an 18% decline from the corresponding period of 2025. These comparisons are not contradictory: activity improved sequentially while remaining below an unusually strong year-earlier quarter.
Hyderabad and Bengaluru led occupied-space growth
Hyderabad recorded net absorption of 4.1 million sq ft, accounting for 29% of the national figure and marking its strongest quarter since Q4 2021. Bengaluru followed with 4.02 million sq ft, or approximately 28.6% of total net absorption.
Delhi-NCR registered 2.2 million sq ft and Mumbai recorded 1 million sq ft. Together, Hyderabad and Bengaluru generated nearly 58% of the quarter’s net occupied-space addition.
Net absorption estimates the change in occupied stock after accounting for space vacated during the period. It is therefore different from the total area covered by lease transactions.
Gross leasing reached 21.9 million sq ft
Gross leasing volume across the eight cities was 21.9 million sq ft in Q3, increasing 3% quarter-on-quarter. Bengaluru led with 5.2 million sq ft, followed by Hyderabad with 4.2 million sq ft, Mumbai with 3.9 million sq ft and Delhi-NCR with 3.8 million sq ft.
Leasing during the first nine months of 2026 reached 64.6 million sq ft, described as the highest volume recorded for that nine-month period. Fresh leases represented approximately 75% of year-to-date activity, while pre-commitments accounted for around 12%.
Gross leasing can include relocations, renewals and other transactions that do not translate into an equivalent net increase in occupied stock. That is why the quarterly gross-leasing figure of 21.9 million sq ft is materially higher than net absorption of 14.1 million sq ft.
Record new office supply pushed vacancy higher
New office completions reached a quarterly record of 22.7 million sq ft—nearly twice the preceding quarter’s level. Bengaluru accounted for 43% of the additions and Hyderabad contributed another 38%.
The two cities consequently represented more than four-fifths of Q3 supply. Year-to-date completions reached 43.3 million sq ft, equivalent to approximately 82% of all office supply added during 2025.
Because new completions exceeded net absorption, the nationwide vacancy rate increased by 63 basis points quarter-on-quarter to 14.37%. This was the first reported vacancy increase following twelve consecutive quarters of compression.
The rise does not necessarily indicate a collapse in demand. It shows that completed supply entered the market faster than tenants occupied additional space during the quarter. The impact will vary by building quality, location and individual city submarket.
GCCs remained a major source of office demand
Global capability centres leased 9.1 million sq ft during Q3, accounting for 42% of quarterly gross leasing. Their year-to-date leasing reached 25.3 million sq ft, or approximately 39% of total activity.
Bengaluru and Pune showed particularly strong GCC concentration, with the segment representing around 65% of leasing in each market. GCCs also accounted for more than half the leasing activity recorded in Bengaluru, Chennai and Pune during the first nine months.
Among industries, banking, financial services and insurance contributed 24% of Q3 leasing, followed by IT-BPM at 22%. Flexible-workspace operators leased 3.5 million sq ft during the quarter and a record 11.9 million sq ft during January–September, up 42% year-on-year.
Why different office reports show different totals
Readers may encounter another Q3 estimate from CBRE showing approximately 21 million sq ft of absorption and 66.4 million sq ft during January–September. CBRE’s published series uses its own market coverage and methodology, while Cushman & Wakefield separately reports gross leasing volume and net absorption.
CBRE also places Hyderabad, Bengaluru and Delhi-NCR at 69% of quarterly leasing and says GCCs represented approximately 41% of Q3 take-up. These figures support the broad direction of demand but should not be combined directly with another consultant’s dataset.
What this means for occupiers and office investors
For office occupiers, record completions could create more choice in newly delivered Grade-A developments, particularly in Bengaluru and Hyderabad. Availability at an individual business district, however, may differ significantly from the national vacancy rate.
For developers and investors, the important test will be how rapidly the new supply is leased and occupied. The next quarter should reveal whether the vacancy increase is temporary absorption lag following a large delivery cycle or the beginning of a more sustained supply-demand imbalance.
Sources and verification
- ET Realty — India office net absorption falls 18% year-on-year, published 11 October 2026.
- Businessworld via TradingView — Q3 Office MarketBeat findings, accessed 12 October 2026.
- CBRE India — India Office Figures Q3 2026, dated 1 October 2026. Separate market-series comparison.