India’s commercial office market is poised for a phase of consolidation in 2026, with leasing activity expected to stabilise around 70-75 million square feet, according to a report by CBRE. The growth is being propelled primarily by Global Capability Centres (GCCs), the rise of flexible workspaces, and heightened participation from institutional investors, underscoring the maturing ecosystem of India’s Grade A office sector.
Data from CBRE indicates that India crossed 50 million square feet of office leasing in the first nine months of 2025, reflecting an 8 per cent year-on-year increase. GCCs alone accounted for nearly 40 per cent of this demand, highlighting their emerging role as anchor occupiers. “GCCs are no longer confined to traditional IT functions; they are increasingly integrating research, product development, and advanced technologies such as AI and cloud computing into their operations,” said an industry analyst. Total office space absorption is projected to reach close to 70 million square feet by the end of 2025. Demand remains broad-based, spanning technology, banking, financial services, insurance, engineering, and manufacturing sectors, as well as operators of flexible workspaces. CBRE anticipates new supply to remain robust at 55–60 million square feet, keeping vacancy rates relatively stable at the national level. Rental values are expected to appreciate 5–10 per cent compared with 2024, reflecting a growing preference for high-quality, amenity-rich, and ESG-compliant assets.
The report highlights a structural shift towards “flight-to-quality” office assets in 2026. Enterprises are increasingly prioritising sustainability, technology adoption, and workplace agility. Flex spaces are predicted to account for 20 per cent of Grade A leasing, with a total stock of 85-90 million square feet. GCCs will contribute nearly half of enterprise demand for these flexible seats, supporting hybrid working models and cost optimisation strategies. Institutional participation is strengthening, driven by REITs and potential IPOs by flex operators. Currently, approximately 16 per cent of Grade A stock is listed under REITs, with a further 370 million square feet potentially monetisable over the coming years. “Institutionalisation enhances transparency, liquidity, and long-term stability in commercial real estate,” said a senior urban planner. Sustainability continues to emerge as a differentiator, with 80-90 per cent of new supply in 2026 expected to be green certified, pushing national green penetration to 70-75 per cent. Retrofitting opportunities exist in older office stock exceeding 350 million square feet, providing scope for rental growth. Complementing office demand, residential, industrial, and alternative assets such as data centres and senior living are also attracting significant investor attention.
Overall, with strong occupier fundamentals, expanding REIT frameworks, and ESG-led design becoming standard, India’s commercial real estate sector is entering a more mature, institutionalised phase, signalling stability and strategic growth for investors and occupiers alike.
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