Robust net absorption in Q2 2026, up 3x y-o-y

• Quarterly net absorption reached 3.2 million square feet in Q2. The SBD captured 53% of this activity, while the suburbs West quadrant accounted for 46%. Meanwhile, fresh leasing activity in the CBD submarket remained subdued.
• Gross leasing in the quarter reached 2.92 million sq ft, registering 63% y-o-y growth. IT & ITeS accounted for 30.7% of leasing activity, while Telecom, Healthcare-Biotech and Real Estate & Construction collectively contributed 23.5%.

New supply of 3.25 million sq ft added in Q2 2026

• In Q2 2026, three new projects became operational, adding 3.25 million sq ft of fresh supply to the market. Of the total completions, 0.4 million sq ft was added in the CBD, while SBD East accounted for the majority share with 2.85 million sq ft.
• Despite healthy new supply, robust net absorption led to a decline in vacancy to 16.7%, down 40 bps q-o-q.

Rental values increased marginally q-o-q

• Overall gross rents were up marginally by 0.4% q-o-q and 1.1% y-o-y. At the submarket level and on a y-o-y basis, gross rents in the Suburbs increased the most, followed by the SBD submarket, which saw slower rent appreciation during the quarter.
• Capital values rose 1.4% q-o-q and 4.8% y-o-y, with yields declining marginally across all submarkets as investor demand remains strong for core assets, as well as value-added and build-to-core opportunities.

Outlook: Strong supply delivery and pre-leasing momentum set the stage for an H2 2026 uptick

• In H2 2026, approximately 5.2 million sq ft of new supply is slated for delivery, which is anticipated to fuel significant leasing activity across all submarkets.
• While Q2 2026 pre-commitments remained modest, a strong pipeline of active RFPs points to accelerated leasing in H2 2026, with annual volumes expected to reach historic highs.