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News18
4 days ago
- Business
- News18
Bengaluru leads Indias office leasing market, vacancy drops to decade low
Last Updated: Bengaluru, Aug 8 (PTI) Bengaluru has emerged as the frontrunner in India's commercial office market, with record leasing activity pushing vacancy levels to a decade low, according to Investment Information and Credit Rating Agency (ICRA). As of June 30, the total Grade A office stock across the top six cities stood at approximately 1,030 msf, with Bengaluru commanding the largest share at 26 per cent, followed by Delhi-NCR with 19 per cent and the Mumbai Metropolitan Region (MMR) with 18 per cent, stated a press release issued by ICRA on Friday. The IT hub is expected to see vacancy ease further from 9.8 per cent to 9.0–9.5 per cent in FY2026, said ICRA. Beyond Bengaluru, Chennai is expected to maintain stable vacancy levels at 9.0–9.5% per cent with approximately 5 million square feet (msf) of new additions. Delhi-NCR is projected to witness a slight improvement, with vacancy levels easing from 22.4 per cent to 21.5–22 per cent, alongside 12 msf of supply. Hyderabad is expected to remain steady with a vacancy range of 17.5–18 per cent and 15.5 million square feet of new space. MMR and Pune are also anticipated to register a decline in vacancy rates, reflecting continued demand and robust net absorption across key markets. ICRA expects this trend to persist through March 2026, supported by consistent demand from Global Capability Centres (GCCs), Banking, Financial Services and Insurance (BFSI) institutions, flex-space operators, and domestic IT-BPM firms, Abhishek Lahoti, Assistant Vice President and Sector Head, Corporate Ratings, ICRA, is quoted as saying. The projected new supply for FY2026 in India is estimated at around 63–64 msf. PTI JR ROH view comments First Published: Disclaimer: Comments reflect users' views, not News18's. Please keep discussions respectful and constructive. Abusive, defamatory, or illegal comments will be removed. News18 may disable any comment at its discretion. By posting, you agree to our Terms of Use and Privacy Policy.
News18
5 days ago
- Business
- News18
Vacancy levels at historic lows, expected to decline further by 2026
New Delhi [India] August 7 (ANI): Vacancy levels, already at historic lows, are expected to decline even further, according to a recent report by rating agency ICRA. From 15.5 per cent in March 2024, vacancy dropped to 13.9 per cent in March 2025 and is projected to fall to 13.0-13.5 per cent by March 2026, reflecting strong fundamentals and consistent demand. 'The net absorption stood at record-high levels of 65 million square feet (msf) in FY2025," said Abhishek Lahoti, assistant vice president and sector head, corporate ratings, ICRA. 'The slowdown in leasing from global IT firms has been compensated handsomely by the GCCs and the BFSI segments, which ICRA expects will continue to dominate leasing activity." India's commercial office market is set to remain resilient in FY2026, with demand expected to stay at record-high levels seen in the previous year. The top six cities–Bengaluru, Chennai, Delhi-NCR, Hyderabad, Mumbai Metropolitan Region (MMR), and Pune–are projected to see robust leasing activity, primarily driven by Global Capability Centres (GCCs), BFSI institutions, flex-space operators, and domestic IT-BPM firms. In FY2025, net absorption across these key markets touched 65 msf, marking a 14 per cent year-on-year increase and surpassing the supply of 58 msf. The momentum appears to be holding steady in the first quarter of FY2026 as well, with 17 msf already absorbed, nearly on par with the 17.7 msf of new supply. As of June 30, 2025, the total Grade A office stock across the six cities stood at approximately 1,030 msf. Bengaluru leads the pack with the highest share at 26 per cent, followed by Delhi-NCR and MMR. City-level vacancy projections also point to a steady outlook. Bengaluru is set to see a dip from 9.8 per cent to 9.0-9.5 per cent with 16.5 msf of new supply, while Chennai is expected to maintain a stable vacancy at 9.0-9.5 per cent. Delhi-NCR and Hyderabad are projected to ease slightly, while MMR and Pune also anticipate a decline, signaling consistent net absorption. On the financial front, ICRA expects the credit profile of major office space developers to remain stable. 'The leverage metrics of the players as measured by debt/NOI is expected to improve to 5.0x-5.5x as of March 2026, from 6.0x in FY2025," Lahoti added. Improved rental income and a favourable interest rate environment are also expected to push debt service coverage ratios to a healthy 1.35x-1.40x in FY2026. (ANI) view comments First Published: Disclaimer: Comments reflect users' views, not News18's. Please keep discussions respectful and constructive. Abusive, defamatory, or illegal comments will be removed. News18 may disable any comment at its discretion. By posting, you agree to our Terms of Use and Privacy Policy.
News18
5 days ago
- Business
- News18
Office Leasing In India Hits Record Highs In FY2025, Momentum May Sustain In FY2026: ICRA
This robust demand in future will be driven by Global Capability Centres, BFSI players, flex-space operators, and domestic IT-BPM firms, says a ICRA report. India's commercial office leasing market is expected to maintain its strong momentum in FY2026, with net absorption likely to match the all-time high levels seen in FY2025, according to rating agency ICRA. This robust demand will be driven by Global Capability Centres (GCCs), Banking, Financial Services and Insurance (BFSI) players, flex-space operators, and domestic IT-BPM firms. In FY2025, net absorption across the top six Indian cities — Bengaluru, Chennai, Delhi-NCR, Hyderabad, Mumbai Metropolitan Region (MMR), and Pune — reached a record 65 million square feet (msf), marking a 14% year-on-year growth and outpacing new supply of 58 msf. This strength has continued into the first quarter of FY2026, which saw net absorption of 17 msf against a supply of 17.7 msf. 'The slowdown in leasing from global IT firms has been compensated handsomely by the GCCs and the BFSI segments, which ICRA expects will continue to dominate leasing activity, accounting for the majority of the space uptake in FY2026," said Abhishek Lahoti, Assistant Vice President and Sector Head, Corporate Ratings at ICRA. Vacancy Levels Expected to Decline Further According to ICRA, overall vacancy levels across these cities are expected to decline to 13.0–13.5% by March 2026, from 13.9% in March 2025 and 15.5% a year earlier, reflecting the strengthening demand-supply fundamentals in the sector. As of June 30, 2025, the total Grade A office stock across the top six cities stood at approximately 1,030 msf. Bengaluru leads with a 26% share of total supply, followed by Delhi-NCR and MMR. New supply in FY2026 is expected to remain robust at 63–64 msf. City-wise vacancy projections indicate continued demand traction: Improving Credit Metrics for Office Players ICRA also noted that the financial health of office space developers remains stable, supported by improving net operating income (NOI) and stronger leasing trends. 'The credit profile of ICRA's sample set of office players is expected to remain stable, driven by healthy growth in NOI backed by higher rentals. The leverage metrics, as measured by debt/NOI, is expected to improve to 5.0x-5.5x as of March 2026, from 6.0x in FY2025," Lahoti said. The debt service coverage ratio (DSCR) is also projected to strengthen to 1.35x-1.40x in FY2026, up from 1.3x in FY2025, driven by rising NOI and lower interest rates. view comments First Published: August 07, 2025, 15:51 IST News business » real-estate Office Leasing In India Hits Record Highs In FY2025, Momentum May Sustain In FY2026: ICRA Disclaimer: Comments reflect users' views, not News18's. Please keep discussions respectful and constructive. Abusive, defamatory, or illegal comments will be removed. News18 may disable any comment at its discretion. By posting, you agree to our Terms of Use and Privacy Policy.
Time of India
5 days ago
- Business
- Time of India
India's office leasing record pace poised to continue in FY26
Live Events (You can now subscribe to our (You can now subscribe to our Economic Times WhatsApp channel India's commercial office market has witnessed a landmark year in fiscal year 2025, with office leasing hitting record levels and the momentum is expected to sustain in FY2026, driven by sustained demand from key sectors such as Global Capability Centres (GCCs), Banking, Financial Services and Insurance (BFSI) institutions, flexible workspace operators, and domestic Information Technology-Business Process Outsourcing (IT-BPM) firms, said ratings agency ICRA ..The net absorption of commercial office space across the top six cities—Bengaluru, Chennai, Delhi-NCR, Hyderabad, Mumbai Metropolitan Region (MMR), and Pune—reached a record high of 65 million sq ft in FY2025, a growth of 14% year-on-year. This surge in demand surpassed the 58 million sq ft of supply for the year, indicating strong pace of growth.'The momentum has carried into the first quarter of FY2026, with 17 million sq ft of net absorption, nearly matching the supply of 17.7 million square feet. ICRA expects this trend to continue in FY2026, with net absorption levels remaining strong and vacancy levels projected to decline further to 13.0–13.5% by March 2026 from all-time low levels of 13.9% as of March 2025 and 15.5% as of March 2024, reflecting strong fundamentals.' said Abhishek Lahoti, Assistant Vice President and Sector Head, Corporate Ratings at of the major trends highlighted by the ratings agency is the shift in leasing activity, with the slowdown in leasing from global IT firms being more than compensated by the growing demand from GCCs and BFSI segments. ICRA expects these sectors to continue driving leasing activity and to account for the majority of space uptake in of June end, the total Grade A office stock across the six major office markets stood at alround 1,030 million sq ft with Bengaluru having the highest share of 26%, followed by Delhi-NCR and MMR. The supply for FY2026 is estimated at approximately 63–64 million sq vacancy trends suggest a healthy outlook for the upcoming year: Bengaluru is expected to see a decline in vacancy rates, from 9.8% to 9.0–9.5% despite 16.5 million sq ft of new is likely to maintain a stable vacancy rate of 9.0-9.5% despite an additional 5 million sq ft of supply. Delhi-NCR is projected to see a slight easing in vacancy rates, from 22.4% to 21.5–22.0%, with 12 million sq ft of new supply, the ratings agency is expected to maintain steady vacancy rates of around 17.5-18.0% with 15.5 million sq ft of new space. Mumbai Metropolitan Region (MMR) and Pune are expected to see a decline in vacancy rates, reflecting strong net absorption and sustained demand in these analysis also points to a positive outlook for the credit profile of office players, with a stable growth trajectory in net operating income (NOI) driven by higher rentals. As a result, the leverage metrics, measured by debt-to-NOI, are expected to improve, falling to a range of 5.0x–5.5x by March 2026, down from 6.0x in with the reduction in interest rates and a rise in NOI, debt service coverage ratio (DSCR) is projected to improve and remain healthy, reaching 1.35x–1.40x in FY2026, compared to 1.3x in conclusion, India's office leasing market is poised to continue its growth trajectory, with strong demand from key sectors and positive financial metrics expected to drive further expansion in FY2026.
