New Delhi, Oct 26 — India's office real estate market remained resilient during the July-September quarter of 2026, with a visible shift in occupier demand as banking and flexible workspace operators increased their presence while the dominance of the IT sector moderated, a report said on Monday.
Pan-India office absorption stood at 23.7 million square feet in Q3 2026, marking a 20 per cent rise from the year-ago period and remaining largely stable sequentially despite global macroeconomic uncertainties and geopolitical challenges, according to a report by workplace solutions firm Vestian.
The quarter recorded the second-highest office absorption on record, underscoring sustained demand for Grade-A office spaces across major cities.
While the IT-ITeS sector continued to be the largest contributor to office leasing, its share of total absorption fell to 23 per cent during the quarter from 41 per cent in Q2 2026 and 31 per cent in Q3 2025.
In contrast, the Banking, Financial Services and Insurance (BFSI) sector saw its share rise sharply to 20 per cent, up from 8 per cent in the previous quarter and 15 per cent a year earlier, as per the report.
Flexible workspace operators also remained key demand drivers. Flex Spaces and Managed Offices accounted for 20 per cent of total absorption in Q3 2026, marginally lower than 22 per cent in the previous quarter but significantly higher than 14 per cent recorded a year ago.
Combined, BFSI and Flex Spaces contributed 40 per cent of the total leasing activity during the quarter, the report noted.
The evolving demand pattern was reflected across cities as well. BFSI firms emerged as the largest occupier segment in Chennai, Hyderabad and Kolkata, while flexible workspace operators led leasing activity in Pune and the National Capital Region (NCR). Meanwhile, Bengaluru and Mumbai continued to draw most of their office demand from IT-ITeS companies, as per the report.
Southern cities remained at the forefront of India's office market growth. Bengaluru, Chennai and Hyderabad together accounted for 60 per cent of total absorption during the quarter, compared with 54 per cent in Q2 2026 and 50 per cent in the corresponding period last year.
On the other hand, the combined share of Mumbai and Pune declined to 20 per cent from 25 per cent in the previous quarter, the report mentioned.
Commenting on the trend, Shrinivas Rao, CEO of Vestian, said office leasing remained resilient, with absorption reaching 65 million square feet during January-September 2026.
“Leasing activity remained resilient, with office absorption reaching 65 Mn sq ft during January–September 2026. If the current momentum continues, annual absorption is projected to exceed 85 Mn sq ft, supported by the sustained demand from IT-ITeS, Flex Spaces, and BFSI,” the report noted.