Net absorption at 4.9 million sq ft in Q1 2026 is 52% higher y-o-y amid sustained market momentum

• Q1 2026 gross leasing reached 5.3 million sq ft, maintaining healthy momentum following Q4 2025’s record 9.3 million sq ft. IT & ITeS sector reasserted dominance with a 53.2% share, followed by Manufacturing/Industrial (20.2%) and Co-Working space providers (15.9%).
• Large deals (>100,000 sq ft) drove market activity, reflecting sustained occupier confidence and strategic corporate space planning. SBD led net absorption with 3.1 million sq ft (62.7% share), with Whitefield contributing 1.7 million sq ft (33.7%).

New supply of 5.9 million sq ft in Q1 2026; up 68% q-o-q while reflecting the strong development pipeline the city

• New supply was distributed across multiple submarkets, with SBD leading at 4.1 million sq ft (69.7% share), followed by Whitefield at 1.5 million sq ft (25.3%). CBD recorded modest additions of 0.3 million sq ft.
• Office vacancy rose marginally to 10.6% in Q1 2026 from 10.5% in Q4 2025, as robust leasing was offset by the new supply additions. SBD’s vacancy stands at 10.6%, while CBD recorded the lowest at 3.1%, reflecting tight supply conditions in the prime office hubs.

Rentals up 6.4% y-o-y, led by premiums on account of tight vacancy submarkets and quality developments

• Property fundamentals remained strong with sustained rental growth across prime locations. CBD commands the highest rents in the city with a healthy rental appreciation (up 2.2% q-o-q), followed by SBD (up 1.4% q-o-q).
• Whitefield and Electronic City recorded rental increases of 2.7% and 0.9% q-o-q respectively, as developers leveraged quality specifications and sustainability certifications to command premium rents.

Outlook: Bengaluru positioned to remain India’s top office market amid diverse occupier demand and investment appetite

• Pre-leasing is likely to remain strong, reflecting robust occupier activity. Tech is expected to lead demand, complemented by accelerating expansion from GCCs, manufacturing, fintech, healthcare, BFSI, advanced manufacturing sectors and flex operators.
• Superior grade projects nearing completion in SBD and Whitefield are expected to meet the sustained demand from tech and manufacturing segments, with certified sustainable developments commanding premium rents and attracting investor interest.