Office Leasing in Delhi-NCR and Mumbai Drops 51% in Q1 2026

Net leasing of office space in Delhi-NCR and Mumbai has seen a sharp decline in the January–March period, slipping 51% to 3.28 million square feet, according to data from Cushman & Wakefield. This significant drop is a major concern for the real estate sector, especially as it comes against a backdrop of 6.74 million square feet recorded in the same period last year.

The primary factor contributing to this decline is the lower fresh supply of office spaces. The report from Cushman & Wakefield notes, “Sustained demand for quality office spaces is expected to exert upward pressure on Grade-A rents over the coming quarters.” This suggests that while the current supply is low, the demand for high-quality office spaces remains robust.

Mumbai, one of the key business hubs in India, reported a 38% drop in net leasing during the quarter, with net leasing shrinking to 1.77 million square feet from 2.87 million square feet a year earlier. This decline is indicative of the broader slowdown in the commercial real estate market.

Delhi-NCR, another major market, witnessed an even steeper fall of 61%, with net leasing shrinking to 1.51 million square feet from 3.87 million square feet in the corresponding period of the previous year. The fresh office supply during the January–March period stood at 1.8 million square feet in Delhi-NCR and 0.89 million square feet in Mumbai, further exacerbating the supply-demand imbalance.

Across India’s eight major office markets—Delhi-NCR, Mumbai, Bengaluru, Hyderabad, Chennai, Pune, Kolkata, and Ahmedabad—net leasing declined 24% to 11.51 million square feet from 15.08 million square feet a year ago. This broad slowdown in net absorption, which reflects the net change in occupied office space, is a key indicator of the overall demand in the real estate sector.

Despite the fall in leasing activity, Delhi-NCR recorded a 2–5% quarter-on-quarter rise in overall rentals during January–March 2026. The region also saw a year-on-year rental increase of 6–9%, with Gurugram’s central business district leading growth at 12–15 per cent over the same period, according to Cushman & Wakefield.

In Mumbai, stock-weighted average rents rose 1.5 per cent quarter-on-quarter in the January–March period to Rs 171 per sq ft, supported by demand in the Andheri-Kurla Road and Thane-Belapur Road corridors. This indicates that while the supply is currently low, the demand for prime locations remains strong, driving rental prices higher.

The real estate sector is closely monitoring these trends, as they have significant implications for both developers and tenants. Developers are likely to reassess their construction plans, while tenants may face increased costs and limited options for expansion. The coming quarters will be crucial in determining whether the market can recover and meet the growing demand for quality office spaces.