Pune office leasing slows down in Jan-March this year; rents rise amid supply crunch

Pune: The demand for office space in Pune moderated in the first quarter (Jan-Mar) of 2026, with net absorption falling to 11 lakh sq ft from 20 lakh sq ft during the same period last year, according to data from Anarock. Industry experts, however, attributed this decline to the exceptionally strong leasing activity seen in 2025 rather than a structural slowdown.

P. Vilas, Pune branch head of operations at Knight Frank India, noted that while leasing has slowed, Global Capability Centers (GCCs) continue to anchor demand. Notably, GCCs account for 55% of Pune’s office space, significantly higher than the 47% average across other major Indian cities.

However, external factors could pose challenges. “Despite the promise of GCCs, increased geopolitical uncertainties may impact their expansion plans,” said Gautam Shahi, senior director at Crisil Ratings. He added that disruptions in the IT and ITeS sectors due to Artificial Intelligence (AI) could further affect hiring and office space requirements.

The dip in demand was accompanied by an even sharper drop in supply. Peush Jain, MD of commercial leasing and advisory at Anarock Group, pointed out that completions plummeted by 69% to just 10 lakh sq. ft.

This supply-demand imbalance has led to a tighter market. Vacancy levels dropped to 11.6%, while average monthly rentals rose by 6% to Rs88 per sq. ft. “This indicates that occupiers still prioritise quality space,” Jain said. “Pune remains one of India’s most structurally resilient office markets, bolstered by its GCC strength.”

Market trends suggest a growing “flight to quality.” Veera Babu, executive managing director, tenant representation, Cushman & Wakefield, observed that sustained occupier interest is outpacing the availability of high-end office space.

“We are seeing a clear supply-demand imbalance, particularly in Grade A and A+ assets within core business districts,” Babu said. He noted that occupiers are increasingly seeking premium, centrally located buildings that support modern technology, evolving workplace cultures, and sustainability requirements.

Industry experts expect vacancy levels to remain tight for the foreseeable future, especially for high-quality assets in established business hubs.