Bengaluru’s commercial real estate market is entering 2026 with strong momentum, led by high office absorption, tight vacancies and steady rental growth across key tech corridors.
Market snapshot end-2025
- Bengaluru recorded Grade-A office supply of about 16.3 million sq ft in FY2025, with a further 8.4 million sq ft added in H1 FY2026, while net absorption was higher at 18.4 msf and 10.1 msf respectively, pushing citywide occupancy to about 90.8% by September 2025.
- JLL data shows annual net office absorption for calendar 2024 at around 14.7 msf, the highest ever for the city, with Q4 2024 quarterly absorption at a record 6.9 msf and vacancy dropping to about 11.9% by end-2024.
Office demand and rental trends
- ICRA estimates that Bengaluru’s Grade-A office stock is about 263 msf, roughly 27% of the total across India’s top six office markets, with net absorption forecast at 16–16.5 msf in FY2026 and occupancy rising further to 89–89.5% by March 2026.
- Average office rentals are projected to rise about 3–4% annually in FY2025 and FY2026, while JLL projects city office rents to grow 4–4.5% per year in 2025–2026, with CBD seeing the fastest growth at 6–7% year-on-year and strong increases also in Whitefield and Outer Ring Road.
Key micro-markets and occupier profile
- Outer Ring Road (South-east), Whitefield and Nagavara together account for roughly 36% of Bengaluru’s office supply, with ICRA expecting vacancy to remain low on Outer Ring Road and Nagavara and to improve marginally in Whitefield through FY2026 on the back of healthy absorption.
- Demand continues to be led by IT-BPM, engineering and manufacturing companies and Global Capability Centres (GCCs), with several national-level reports noting that GCCs account for a large share of gross leasing across top cities and that Bengaluru remains a preferred hub due to its deep talent pool.
2026 outlook: offices, retail, warehousing
- National forecasts for 2026 suggest India’s office absorption across the top 6 cities could reach 60–70 msf, with Bengaluru expected to retain a leadership share of this activity given its recent outperformance and robust pre-commitments in new supply.
- ICRA expects Bengaluru’s office vacancy to stay in single digits through FY2027, supported by steady new supply, strong GCC expansion and gradual rental growth, which together create a sizeable investment opportunity estimated at around ₹1.84–1.96 lakh crore in REIT-ready office assets.
- On the industrial and warehousing side, India is projected to see annual demand of about 30–40 msf in 2026, and Bengaluru is highlighted among key southern hubs benefiting from e-commerce, 3PL and manufacturing growth, pointing to strengthening demand for logistics parks along peripheral corridors.
Investor implications for 2026
- With absorption consistently outpacing or closely tracking new supply, rising rentals, and single‑digit vacancy expected to continue, core office assets in established corridors (CBD, SBD/ORR, Whitefield, North Bengaluru) are likely to remain attractive for long-term institutional and REIT investors through 2026.
- For strata and smaller investors, the combination of 3–4.5% annual rental growth, stable occupancy in Grade‑A buildings and continued demand from technology and GCC occupiers suggests that 2026 could offer a favourable entry window into well-located commercial assets, especially in emerging micro‑markets that are seeing improving infrastructure and gradually firming rents.
Commercial Real Estate Boom as Offices, Rentals and GCC Demand Hit All‑Time Highs as we enter 2026 added by admin on
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Bengaluru’s commercial real estate sector is showing impressive resilience with the record-breaking office absorption. It’s interesting to see how tech corridors are driving this demand, and it will be fascinating to watch how supply and vacancy rates balance out in the coming year.