Mumbai logs a record office half even as national leasing slips 2 per cent

India's office market absorbed 48 million sq ft in the first half of 2026, down 2 per cent from a year earlier but still the second-strongest half-year on record, according to Knight Frank India. Mumbai was the outlier: its 7.3 million sq ft of leasing was the city's highest-ever half-year volume, up 33 per cent year-on-year. Bengaluru remained the largest market at 14.1 million sq ft.

The composition of demand keeps shifting. Third-party IT services took 13 per cent of leased space, down from 22 per cent a year ago, as AI adoption and cautious hiring reshape technology outsourcing, while global capability centres continued to anchor a large share of transactions. Rents rose across all eight major markets as vacancy tightened.

The capital side tells the same story: a separate Knight Frank analysis puts the office sector at 89 per cent of real-estate private-equity inflows in the half.

For the MMR, a record office half matters beyond commercial landlords. Employment nodes drive housing demand around them, and sustained absorption in BKC, Powai, Thane and Navi Mumbai's business districts tends to show up in residential activity in the surrounding belts with a lag.