New Delhi, April 13 : The office leasing market in India witnessed a 10 per cent year-on-year (YoY) growth to 21.6 million sq ft in the first quarter of 2026, marking the strongest leasing activity in the past five years, according to a report released on Monday.

According to the Savills India report, in terms of supply, the activity declined by 28 per cent year-on-year to 7.9 million sq ft, while the overall vacancy rate eased to 13.9 per cent during the same period, supported by steady leasing activity and disciplined supply additions.

Sector-wise, the technology industry dominated leasing activity with a 32 per cent share, followed by flexible workspaces at 22 per cent and BFSI at 12 per cent, the report said.

Large deals -- 100,000 sq ft or more -- continued to drive market activity, contributing 52 per cent to overall transactions during the quarter.

"Indiaâ??s office market has entered 2026 on a strong footing despite global headwinds, with Q1 absorption of 21.6 million sq ft, up 10 per cent year-on-year," said Naveen Nandwani, MD, Commercial Advisory and Transactions, Savills India.

He added that demand remains resilient, led by technology, BFSI, manufacturing, and flexible workspace operators, with global capability centres (GCCs) continuing to fuel momentum.

Bengaluru and Delhi-NCR together accounted for around 5 million sq ft of new completions during the period, representing nearly two-thirds of the total supply added across India.

City-wise, Bengaluru retained its position as the leading office market, recording 6 million sq ft of leasing activity -- an increase of 25 per cent year-on-year -- driven by IT-BPM operators.

Meanwhile, Delhi-NCR recorded gross absorption of 3.6 million sq ft in Q1 2026.

Hyderabad emerged as a strong performer, with gross absorption rising 39 per cent year-on-year to 4.3 million sq ft, supported by large deals and strong demand from GCC occupiers. Pune also saw healthy traction, with leasing activity increasing 20 per cent year-on-year to 3 million sq ft. However, Mumbai saw gross absorption of 2.8 million sq ft, a decline of 15 per cent year-on-year amid delayed expansion plans by occupiers.

/IANS