Bengaluru Office Market Poised for Strong Growth with Higher Space Addition and Rising Occupancy by FY27

Bengaluru’s office market is set for a strong phase of expansion over the next two years as fresh commercial space, healthy leasing activity and steady corporate demand continue to shape its trajectory. According to a detailed assessment by ICRA, the city is expected to witness nearly twenty five million square feet of new office space during the second half of FY27. A significant portion of this upcoming space is already committed under pre leasing agreements, reflecting the confidence that major occupiers continue to place in the Bengaluru market.

Even though FY26 and FY27 together are expected to add between sixteen and seventeen million square feet of new office stock, ICRA projects that overall occupancy will continue to improve. The report estimates that the occupancy rate will rise to around ninety one to ninety one point five percent by March 2026 and further increase to ninety two to ninety two point five percent by March 2027. This steady upward trend is attributed to sustained demand from global capability centres which continue to expand operations across the city.

Bengaluru recorded a strong performance in the previous financial periods as well. The city added sixteen point three million square feet of new grade A office space in FY25 and another eight point four million square feet in the first half of FY26. Net absorption during these periods stood at eighteen point four million square feet and ten point one million square feet respectively. As net absorption consistently outpaced new additions, occupancy levels increased by two hundred and thirty basis points to reach ninety point eight percent by September 2025.

Among the top six office markets in India, which include Chennai, Delhi NCR, Hyderabad, Mumbai Metropolitan Region and Pune, Bengaluru holds the highest share of grade A supply at twenty six percent. ICRA also highlights the rapid growth of the Hebbal to Devanahalli corridor where office development has expanded steadily. The corridor’s share of total supply is expected to rise to eight percent by FY27 compared to only three percent in FY18.

With strong demand fundamentals and a robust supply pipeline, Bengaluru continues to reinforce its position as India’s most active and resilient office market.