India’s office market defies global headwinds with record leasing in Q1

India’s office market activity continues to break new ground despite geopolitical and anticipated AI-driven disruption headwinds for the sector, with gross leasing hitting 21.5 million sq. ft, the highest ever for any first quarter period across years.

The January-March performance not only marks the highest leasing volume for any first quarter but also exceeds the quarterly average recorded in 2025, signalling sustained occupier confidence and setting the stage for another strong year.

Leasing activity remained broad-based, led by the technology sector, which accounted for a 29.1% share, followed by flex operators at 25.9% and BFSI at 20.0%, showed data from JLL India. Global Capability Centres (GCCs) and flexible workspace operators continued to anchor demand, contributing 45.5% and 25.9%, respectively, to overall leasing activity.


At the city level, Bengaluru retained its leadership position with a 24.8% share of leasing volumes, followed by Mumbai (19.5%), Hyderabad (16.8%), Pune (14.5%) and Delhi NCR (14.2%). Strong pre-commitment conversions drove year-on-year growth in key markets such as Mumbai, Bengaluru and Hyderabad.

GCCs emerged as the dominant occupier segment across major cities including Bengaluru, Chennai, Hyderabad and Mumbai. In Bengaluru, GCCs accounted for 70% of leasing activity, the highest in two years, while their share stood at 46.3% in Mumbai and 42.9% in Hyderabad. In contrast, flex operators led demand in Pune with a 54.8% share and in Delhi NCR with 32.9%.

“This growth is being driven by a fundamental transformation in how global enterprises leverage India, with GCCs expanding their footprint by 43% year-on-year to 10 million sq. ft. and now commanding 45.5% of total leasing activity. These are not traditional back-office operations, they are strategic innovation hubs focused on AI development, digital engineering, and core product development,” said Rahul Arora, Head - Office Leasing & Retail Services, Senior Managing Director (Karnataka, Kerala), India, JLL.

According to him, market fundamentals continue to strengthen, with pan-India vacancy dropping to a five-year low of 14.7% and net absorption reaching a record 13.7 million sq. ft. for the quarter.

Net absorption during the quarter rose to a record 13.7 million sq ft, up 7.0% year-on-year, led by Bengaluru (36.0%), Hyderabad (22.6%), Mumbai (12.0%) and Delhi NCR (10.7%). All major cities, except Delhi NCR, recorded improved absorption compared to a year ago.

“With nearly 200 new GCCs established across India between 2024 and 2025, and current deal pipelines indicating momentum toward the 100 million sq. ft. annual milestone over the next two years, we're witnessing India's evolution from cost center to innovation epicenter, with Bengaluru firmly at the forefront of this multi-year growth trajectory,” he added.

Vacancy levels continued to tighten, declining 50 basis points quarter-on-quarter to a five-year low of 14.7%, supported by sustained absorption and lower completions.

With GCC expansion, rising flex adoption, and strong deal pipelines, India’s office market remains on track for sustained multi-year growth, reinforcing its position as a global hub for innovation-led enterprise operations.