Bengaluru is set to add nearly 25 million sq. ft. of new office space in H2 FY27, according to ICRA. Despite heavy supply, strong GCC-led absorption is expected to push occupancy above 92% by FY27, reinforcing the city’s position as India’s most resilient and high-growth office market.
Bengaluru’s office market is preparing for its next major expansion phase, with close to 25 million sq. ft. of new office space expected to come online in the second half of FY27, according to ICRA. What stands out is the market’s ability to absorb supply at scale. Nearly 50% of this upcoming supply is already pre-leased, reflecting strong interest from both domestic and international occupiers entering or expanding in the city.
Occupancy to Rise Despite Heavy Supply
ICRA’s assessment highlights Bengaluru’s exceptional absorption strength. Even with an expected 16–17 million sq. ft. of new supply each year across FY26 and FY27, occupancy levels are projected to improve further. The market is expected to reach 91–91.5% occupancy by March 2026 and climb to 92–92.5% by March 2027. Leasing demand continues to be driven by Global Capability Centres (GCCs), IT services, engineering firms, research-led businesses, and emerging sectors.
Supply and Absorption Trends Remain Healthy
Recent data underlines this resilience. Bengaluru recorded 16.3 million sq. ft. of fresh Grade-A office supply in FY25 and another 8.4 million sq. ft. in H1 FY26. During the same periods, net absorption stood higher at 18.4 million sq. ft. and 10.1 million sq. ft., respectively. As a result, overall occupancy rose sharply by 230 basis points, from 88.5% in March 2024 to 90.8% by September 2025. GCC-led portfolio expansion and consolidation in prime business districts continue to anchor demand.
City Leads India in Grade-A Office Stock
As of September 30, 2025, Bengaluru accounts for the largest share of Grade-A office stock among India’s top six cities, contributing 26% or nearly 277 million sq. ft. to the national total. Key micromarkets such as Outer Ring Road (Southeast), Whitefield, and Nagavara together make up about 37% of the city’s office supply. Vacancy levels in these locations remain low, supported by steady net absorption and limited near-term supply in select pockets.
Rentals Firm Up, Developers Stay Dominant
The city’s office market also benefits from a strong developer landscape. The top 10 developers control 61% of Bengaluru’s Grade-A office stock, with most operating at occupancy levels above 90%. Rental values across prime micromarkets have grown at a steady 3–4% CAGR over the past five years, and ICRA expects average rentals to rise by another 3–4% in FY26, supported by tightening vacancies and sustained demand.
Hebbal–Devanahalli Emerges as a Growth Corridor
Among emerging clusters, the Hebbal–Devanahalli corridor is gaining prominence. Its share of Bengaluru’s total office supply is expected to rise to around 8% by FY27, up from just 3% in FY18. Improved connectivity, availability of large land parcels, and proximity to the airport are making the corridor attractive for new Grade-A and mixed-use developments.
Strong Fundamentals Support Long-Term Outlook
Despite a heavy supply pipeline, ICRA believes Bengaluru’s office market will maintain healthy occupancy and absorption levels. With GCC expansion, pre-leasing momentum, and demand for future-ready, sustainable workspaces, Bengaluru is well-positioned to remain India’s most stable and high-performing commercial real estate market over the coming years.
