Net leasing of office space declined 24 per cent in January-March across top eight cities at 11.51 million sq ft on lower demand and supply constraints, according to Cushman & Wakefield.

The net leasing stood at 15.08 million sq ft in the year-ago period.

Net absorption is a key indicator of real estate demand, representing the net change in occupied office space .

Real estate consultant Cushman & Wakefield pointed out that the corporates' pace of business expansion might be slow going forward because of the West Asia conflict but India's medium to long term demand outlook remains bullish.

The consultant attributed the fall in net leasing or absorption of office spaces to softer fresh leasing following a strong end to 2025.

The delay in completion of office complexes limited the physical realisation of pre-committed demand during the January-March quarter, it pointed out.

However, the gross leasing of office space across the eight major cities rose 13 per cent to 21.89 million sq ft in January-March from 19.3 million sq ft in the year-ago period.

The eight cities are- Delhi-NCR, Mumbai, Bengaluru, Hyderabad, Chennai, Pune, Kolkata and Ahmedabad.

The gross leasing means all leasing activity in the market, including fresh take-up, open market renewals by occupiers as well as pre-leasing. It is an indication of overall market activity.

Anshul Jain, Chief Executive, India, SEA, MEA & APAC Office and Retail, Cushman & Wakefield, said, India's office market has carried forward the momentum of 2025 into the first quarter of this year.

Global Capability Centres, accounting for around 40 per cent of leasing, remained a key driver, he added.

"This continued demand is now translating into tighter market conditions, with vacancy levels declining steadily, reflecting a persistent demand-supply imbalance across key markets, particularly in high-quality assets," Jain said.

Looking ahead, he said around 61 million square feet of new supply would come into the market.

"As much of it will be premium Grade A+, we could see some easing in vacancy levels," Jain said.

However, he noted that strong absorption and pre-commitment trends are likely to keep overall vacancy broadly stable, even as rental momentum remains firm.

"Amid the global uncertainties, recently accentuated due to the West Asia crisis, we are closely assessing how occupiers factor these into their decision-making. And while the pace of expansion may be impacted in the near term, underlying demand in India continues to remain resilient," Jain said.

Veera Babu, Executive Managing Director, Tenant Representation - India, Cushman & Wakefield, said the office market has entered 2026 with a clear supply demand imbalance, with sustained occupier interest continuing to outpace the availability of quality office space across key markets.

"Net absorption moderated during the quarter as transaction activity remained constrained by the slower pace of project completions. As incremental supply begins to enter the market over the coming quarters, absorption is expected to improve in line with sustained occupier demand," said Veera Babu.

He observed that occupiers are increasingly prioritising asset quality, location efficiency and readiness. The corporates have a clear preference for buildings that can support evolving workplace, technology and sustainability requirements, Babu said.