Global capabilities centres drive commercial leasing activity in Q1 | Photo Credit: Andrii Yalanskyi

India’s office market saw record absorption of 29.9 million square feet in the first quarter of 2026, but the residential segment is seeing signs of a slowdown, with a 4 per cent decline in sales, real estate consultancy Knight Frank said in its report on Tuesday.

Sales momentum in the residential space was subdued, with all the main markets, including Mumbai, the New Delhi Capital Region and Pune witnessing a decline in sales. Units above ₹1 crore recorded a 11 per cent year-on-year growth in sales, but those priced less than ₹50 lakh and between ₹50 lakh to ₹1 crore contracted 23 per cent and 12 per cent, respectively.

Unsold inventory levels in the residential segment have continued to rise since 2020, driven by supply consistently outpacing sales. This increase has been largely concentrated in the ₹1 crore and above segment, reflecting sustained developer focus on higher ticket size projects in recent years. 

While the residential space is seeing fatigue, the office segment is on an upswing said Gulam Zia, international partner and senior executive director, Knight Frank.

According to the Knight Frank report, commercial leasing activity in the country is dominated by global capabilities centres, which were the primary growth drivers in Q1. The GCCs accounted for 14.4 million square feet or 48 per cent of total leasing in the quarter.

Among other occupier segments, India-facing businesses and third-party IT services operators accounted for 19 per cent and 15 per cent of total leasing, respectively. Mumbai and Hyderbad saw record commercial leasing activity. Rent growth remained positive, with 2-15 per cent gains across the cities.

Published on April 7, 2026