Office vacancies fall in top cities as companies expand play

Mumbai: India's office market recorded the lowest vacancy rate in the past 17 quarters in the July-September period, bucking the global trend of workspace contraction, as occupiers expanded headcount and footprint across major cities. The rise in activity comes alongside record net absorption and leasing momentum, signalling a broad-based expansion for the sector.

Vacancy levels fell to 15.7% against 16.9% a year ago and 16.1% in the previous quarter, with core markets such as Bengaluru, Mumbai, Hyderabad and Delhi-National Capital Region (NCR) witnessing both year-on-year and sequential declines, showed JLL India data. Bengaluru's vacancy hit a three-year low, while Mumbai and Delhi-NCR were at their lowest in 15 years.

"The country stands tall as occupiers pivot their post-uncertainty expansion plans, keeping India central to their growth strategies. With robust office occupancies already creating space constraints in the existing portfolios of large occupiers, there are clear signals of imminent portfolio expansion," said Radha Dhir, CEO and country head, India, JLL.

Given the strong pipeline of deal activity and current performance trajectory, India's leasing volume is expected to reach unprecedented levels of at least 80 million square feet this year, she said.

Net absorption across the top seven markets in the country touched nearly 40 million sq ft in the first nine months of 2025, up 24.8% year-on-year. The July-September quarter recorded 15.76 million sq ft of net absorption, a 40% increase from the previous quarter.

"While Q3 saw transaction timing impacts, the fundamentals point beyond recovery. We are witnessing a structural market evolution. India isn't just absorbing global volatility; it's becoming the backbone of next-generation corporate operations, with a record year-end finish well within reach," said Samantak Das, chief economist and head of research and Real Estate Intelligence Service, India, JLL.

The January-September period also marked the highest-ever cumulative net absorption for Delhi-NCR, Bengaluru, Pune and Chennai. Bengaluru led activity with a 26.5% share, followed by Delhi-NCR at 24.8% and Hyderabad at 13.7%.



Demand from global capability centres (GCCs), including new entrants, continued to be strong, accounting for about half the active space requirements.

The revival in third-party tech activity, driven by artificial intelligence and new technology initiatives, further boosted India's tech outsourcing market.

Information technology and IT-enabled services continued to dominate with a 28% share, followed by flexible workspaces at 19%, while banking, financial services and insurance (BFSI) and manufacturing maintained 15-16%.

GCCs accounted for about half the active space demand, reinforcing India's position as a central hub in global corporate expansion plans.

Delhi-NCR and Bengaluru together accounted for nearly half the net absorption during the September quarter, at 24.6% each. Pune posted the sharpest quarterly increase of 148%, followed by Mumbai at 67.5%. On a year-on-year basis, Delhi-NCR grew 49.9%, Bengaluru 31.1% and Chennai 37.7%.

A steady pipeline of deals is supporting high leasing activity, while low vacancy levels show India's growing importance in global expansion plans.