New Delhi, July 20 -- India's office space market is seeing consolidation, with robust demand expected to support a marginal decline in vacancy levels and drive stronger rental growth over the medium term, according to Nuvama Institutional Equities.

According to the report, India's gross office leasing declined 3 per cent year-on-year to 20.6 million sq ft in Q2CY26, as the US-Iran conflict affected corporate decision-making timelines.

At the same time, net leasing fell 19 per cent YoY and 1 per cent QoQ to 11.1 million sq ft, while supply stood at 10.9 million sq ft, down 8 per cent YoY but up 47 per cent QoQ. "Net leasing declined as delay in completion of offices limited realisation of pre-committed demand," it noted.

Noting that va...