Vestian reported a 36 per cent quarter-on-quarter decline in new office completions to 9.7 million sq ft in Q1 2026, marking the lowest level in the past four quarters amid the West Asia crisis.

The slowdown was led by cities such as Bengaluru, Hyderabad and Mumbai, where developers adopted a cautious approach. Hyderabad saw the steepest drop, with completions falling 95 per cent to 0.3 million sq ft from 6.0 million sq ft in the previous quarter.

Despite constrained supply, office absorption rose 20 per cent year-on-year to 21.53 million sq ft, driven by sustained demand from global capability centres and India’s attractiveness as a business hub.

The divergence between demand and supply led to tightening vacancies, with pan-India vacancy levels improving to 9.5 per cent from 10.8 per cent in the previous quarter. Rentals continued to rise, indicating a shift towards a landlord-driven market, particularly in prime locations.

Commenting on the trend, Shrinivas Rao, CEO, Vestian, said, “India’s office market exhibited resilience… robust absorption has tightened vacancies and driven rental appreciation.”

City-wise, Bengaluru led leasing activity, while Pune recorded its highest-ever quarterly absorption. Mumbai remained the costliest office market, and Chennai saw a sharp rise in completions due to a low base effect.

The report highlights a market recalibration, with cautious supply amid geopolitical uncertainties and sustained demand expected to drive the next phase of growth.