Advertisement
Bengaluru is set to add nearly 25 million sq. ft. of new Grade-A office space in the second half of FY27, with about a quarter already pre-committed. The city had added 16.3 million sq. ft. in FY25 and 8.4 million sq. ft. in the first half of FY26, while net absorption stayed strong, led by expanding global capability centres. Occupancy has risen to 90.8% and is projected to reach around 92-92.5% by FY27. Bengaluru now holds 26% of Grade-A stock across major metros. Growth is also shifting to peripheral areas like the Hebbal-Devanahalli corridor, and vacancy levels are expected to remain tight despite large upcoming supply.
Bengaluru is expected to add close to 25 million sq ft of new Grade-A office stock in the latter half of FY27, with ICRA noting that nearly 25 % of this pipeline has already been tied up through pre-commitments. Earlier in FY25, the city had brought in 16.3 million sq ft of fresh space, followed by a further 8.4 million sq ft in the first half of FY26. Net absorption remained robust at 18.4 million sq ft and 10.1 million sq ft across these respective periods, driven largely by global capability centres expanding their operational footprints. Advertisement
As absorption continued to surpass fresh supply, occupancy strengthened by 230 basis points, rising from 88.5 % in March 2024 to 90.8 % by the past quarter. ICRA expects this trajectory to extend into the next two years, projecting occupancy to touch 92-92.5 % by the end of FY27. Demand from GCCs, BFSI companies and flexible workspace operators is anticipated to remain consistent, supporting the overall outlook.
By the past quarter, Bengaluru accounted for nearly 26 % of the total Grade-A office stock across India's top six metros, amounting to approximately 277 million sq ft. This positions the city well ahead of Delhi-NCR, Mumbai Metropolitan Region, Hyderabad, Pune and Chennai. Between FY2018 and FY2025, Bengaluru's Grade-A stock expanded at a compounded annual growth rate of around 7 %, reflecting sustained developer activity and steady demand from technology-led occupiers.
Peripheral business districts are also gaining prominence. The Hebbal-Devanahalli corridor, anchored by its proximity to the international airport, has emerged as a key growth cluster. Its share of total office supply, which stood at about 3 % in 2018, is expected to reach nearly 8 % by FY27 as more large parks and mixed-use developments are delivered.
Although the city is slated to receive a significant wave of new inventory, vacancy levels are expected to remain tight. Pre-leasing across upcoming projects and sustained expansion by established occupier categories are likely to keep vacancies in single digits. Industry observations suggest that Bengaluru's office market has historically absorbed large volumes of supply without material vacancy spikes, primarily due to its strong base of technology firms and growing GCC ecosystem.
5th Jun, 2025
25th May, 2023
11th May, 2023
27th Apr, 2023
Advertisement
Facebook
Whatsapp
