Office Space Leasing in Delhi-NCR and Mumbai Sees Sharp 51% Decline in Q1 2026
Net leasing of office space in Delhi-NCR and Mumbai experienced a significant downturn during the January–March 2026 period, plummeting by 51% to 3.28 million square feet. This sharp contraction comes in stark contrast to the 6.74 million square feet recorded in the same quarter of the previous year, according to comprehensive data released by global real estate services firm Cushman & Wakefield.
Key Factors Behind the Decline
The report highlights that lower fresh supply was a primary driver of this substantial drop in leasing activity. Across India's eight major office markets—Delhi-NCR, Mumbai, Bengaluru, Hyderabad, Chennai, Pune, Kolkata, and Ahmedabad—net leasing declined by 24% overall, falling to 11.51 million square feet from 15.08 million square feet a year earlier.
Net absorption, which measures the net change in occupied office space and serves as a crucial indicator of real estate demand, showed a broad slowdown across these markets, reflecting broader economic trends and supply constraints.
Regional Breakdown of Leasing Activity
Delhi-NCR witnessed an even steeper decline, with net leasing shrinking by 61% to 1.51 million square feet, down from 3.87 million square feet in the corresponding period of 2025. Fresh office supply in Delhi-NCR during the quarter stood at 1.8 million square feet.
Mumbai reported a 38% drop in net leasing, decreasing to 1.77 million square feet from 2.87 million square feet a year earlier. The city's fresh office supply was recorded at 0.89 million square feet for the January–March period.
Rental Trends Defy Leasing Slump
Despite the pronounced fall in leasing volumes, rental prices demonstrated resilience and growth in both key markets. In Delhi-NCR, overall rentals increased by 2–5% quarter-on-quarter during January–March 2026. On a year-on-year basis, the region saw a rental rise of 6–9%, with Gurugram's central business district leading the charge with an impressive 12–15% growth over the same period.
Mumbai's stock-weighted average rents rose by 1.5% quarter-on-quarter to Rs 171 per square foot, supported by sustained demand in prominent corridors such as Andheri-Kurla Road and Thane-Belapur Road.
Market Outlook and Future Projections
The Cushman & Wakefield report emphasizes that sustained demand for quality office spaces is expected to continue exerting upward pressure on Grade-A rents in the coming quarters. This trend suggests that while leasing volumes may have contracted due to supply limitations, the underlying appetite for premium office environments remains robust.
The contrasting dynamics of declining leasing activity alongside rising rental rates point to a tightening market where available quality inventory is becoming increasingly scarce, potentially driving further rental appreciation as demand persists.
