NET leasing of office space is likely to rise 6-7 per cent this fiscal across the top seven cities, but demand may be impacted due to geopolitical uncertainties,tariff-relatedissuesandpossible disruptions caused by artificial intelligence,according to Crisil Ratings. The IT and ITeS sector is a major driver of office space demandinIndia.Inviewof global economic uncertainties,companies are cautious about expansion plans,a scenario that adversely impacts investments. In astatement onTuesday, Crisil Ratings also projected that the vacancy level in India's Grade Acommercial office space is expected to gradually decrease by about 50 basis points (bps) to 15.5-16.0 per cent by the end of the current fiscal.

 

Netleasing (measured in million squarefeet) reflects the net change in occupied space after accounting for both new leases and move-outs (vacated space) within the same period. FY26 net leasing is estimated at around 48-49 million square feet.ThesevencitiesareMumbai Metropolitan Region (MMR), Delhi-NCR, Bengaluru, Pune, Hyderabad, Chennai and Kolkata. GautamShahi,SeniorDirector, CrisilRatings,said, “Overall, the net leasing is expected to grow at 6-7 per cent this fiscal. However,this is exposed to risks related to disruptions in the IT/ ITeS sector on account of AI, whichmay impact hiring and expansions”. Increased geopolitical uncertainties and tariff-relatedissues, too,mayimpacttheleasingplans of GCCs (Global Capability Centres), he added.

 

“While these pose short-term challenges,India's long-term structural advantages,including alarge and skilled talent pool, costcompetitiveness,policy-level support from central and state governments and broader economic stability,are expected to help the sector tide over the hiccups,” Shahi said. Crisil Ratings mentioned that the current global uncertainties and challenges that could emanate from AI-led disruptions do pose risks to its projection of adecline in vacancy levels.