India’s office market is gaining momentum, but the most important change is not simply higher leasing. The demand base is shifting towards global capability centres (GCCs) and front-office occupiers, creating a stronger link between India’s commercial real estate performance and the global reorganisation of work. The latest comments from Knowledge Realty Trust (KRT) chief executive Shirish Godbole, together with the trust’s quarterly performance, provide a useful view of how that shift is taking shape across Mumbai, Chennai, Gurugram and Pune.
Godbole, who is also chairperson of the Indian REITs Association, told Business Standard that India was experiencing a “very good period of office demand” from both GCCs and front-office occupiers. The distinction matters. GCCs represent multinational companies’ offshore or global operating functions, while front-office occupiers include organisations such as law firms, accounting firms, media companies and large Indian conglomerates. Their requirements, locations and leasing decisions are not identical, but together they are strengthening demand for institutional office space.
KRT’s results show the effect in operating terms. The trust recorded gross leasing of 0.8 million square feet in the second quarter of FY27, taking cumulative leasing in the first half of the financial year to 2.2 million square feet. GCCs accounted for 42 per cent of total demand, compared with around 30 per cent four years ago, according to Godbole. That change in the tenant mix is the clearest structural signal in the report. The office market is not merely recovering through a broad-based return of conventional occupiers; it is being increasingly supported by companies locating higher-value, often globally integrated functions in India.
The growth is also visible in KRT’s financial and operating indicators. Net operating income rose 15 per cent year-on-year, with the company describing the increase as entirely organic and generated from existing assets. Revenue increased 13 per cent year-on-year to ₹1,272.5 crore in the second quarter, while the trust declared record distributions of ₹764 crore for the quarter. Occupancy stood at 93 per cent by area and 94 per cent by value. Godbole expects occupancy to reach around 94-95 per cent over the next two quarters.
These figures do not represent the entire Indian office market, but they are significant because KRT is India’s largest REIT by market capitalisation and has a diversified portfolio across important employment centres. They show how leasing momentum is translating into income growth and higher utilisation within an institutional property platform. They also indicate why the composition of demand may be as important as the headline volume of space absorbed.
Mumbai remains central to that portfolio. Around one-third of KRT’s assets by value are located in the city, giving the trust exposure to front-office occupiers such as law firms, accounting firms, media companies and large Indian conglomerates. Mumbai’s role in the portfolio connects office demand to the city’s wider economic structure, where financial services, professional services, media and corporate headquarters require centrally located and institutionally managed workplaces.
At the same time, KRT is considering a larger presence in Chennai and Gurugram. It currently has one asset in each market and is exploring opportunities in Pune, where it has no existing exposure. The proposed expansion is not a confirmed acquisition programme, but it shows how office landlords are assessing the next layer of demand beyond established portfolio concentrations. Chennai, Gurugram and Pune are already important locations in India’s corporate and technology economy, and the trust’s stated interest places them within its geographic growth conversation.
The city-level implications are different in each case, although the supplied report does not provide detailed vacancy, rental or transport data for these markets. That limitation is important. The evidence confirms that KRT is exploring expansion and that demand is strong, but it does not establish how much additional space each city will require, which submarkets will benefit, or whether new supply will be delivered at the same pace as leasing demand.
The report also links India’s office demand to policy changes outside the country. Godbole said tighter visa and immigration policies in the United States, Australia and Canada could accelerate the movement of work towards India. His argument is that when sending employees abroad becomes more difficult, companies may locate more functions in India instead. In this reading, immigration policy becomes an indirect driver of office demand: it affects where work is performed, which in turn affects where companies need buildings, employees and supporting urban services.
That claim is presented as Godbole’s assessment, not as a quantified forecast. The report does not provide figures showing how many jobs or office leases have resulted from specific visa restrictions. Nor does it establish that immigration policies are the principal cause of the current leasing cycle. However, the possibility is relevant because it shows how office markets are influenced by decisions that sit outside conventional real-estate policy. Corporate location strategies, cross-border mobility rules and the expansion of global operating functions can all affect demand for urban commercial space.
The rising share of GCC demand is the stronger measurable indicator. Its increase from around 30 per cent of total demand four years ago to 42 per cent currently suggests that the tenant base has changed materially within the period cited by KRT. For cities, the significance extends beyond the floor area occupied. GCC expansion can influence demand for employee transport, housing, food services, business districts, digital connectivity and other forms of urban infrastructure. The report does not quantify those secondary effects, but the connection is inherent in the concentration of office employment.
It also changes the way commercial buildings are evaluated. A landlord serving large global occupiers must maintain occupancy, building quality and operating standards that support long-term corporate requirements. KRT’s occupancy figures, measured separately by area and value, show that the trust is managing a portfolio where higher-value properties are slightly more occupied than the portfolio by area. The difference—94 per cent by value compared with 93 per cent by area—suggests that the most valuable parts of the portfolio are performing marginally better on the company’s reported metrics.
For the REIT sector, the numbers point to a parallel shift in investor participation. Godbole said the Indian REIT investor base had grown from around 4,000 in 2019 to approximately five lakh currently and was expected to increase further. The expansion of the investor base gives office assets a wider financial audience and places operating performance within a more visible investment structure. KRT’s record quarterly distributions and growth in net operating income illustrate how leasing and occupancy are converted into returns for REIT investors.
Yet a larger investor base also makes the quality and durability of office income more important. The evidence in the report is positive on current occupancy, leasing and distributions, but it does not establish how long the present pace of demand will continue, how lease renewals will perform, or how much new supply is under construction in the relevant markets. Those questions cannot be answered from the quarterly figures alone. They are the issues that will determine whether the current cycle represents sustained expansion or a strong phase within a more variable office market.
The institutional question is therefore how India’s cities will accommodate a more concentrated and globally connected office economy. REITs such as KRT provide an organised ownership and operating structure for large commercial assets. Their expansion decisions can influence which cities receive new institutional office investment and which districts attract additional corporate occupiers. Municipal agencies and state governments, meanwhile, remain responsible for the urban systems around those assets, including transport access, utilities and land-use coordination. The supplied report does not assess those systems, but the geographic expansion under consideration makes them relevant to the next stage of the market.
The immediate evidence is clear: KRT is leasing space at a strong pace, GCCs now account for a larger share of demand than four years ago, occupancy is high and the trust is exploring additional exposure to Chennai, Gurugram and Pune. The broader interpretation is that India’s office market is becoming more closely tied to the country’s role in global corporate operations. What remains uncertain is how much of that demand will translate into durable, citywide economic and infrastructure gains. Future quarterly leasing, occupancy and expansion disclosures will show whether the current GCC-led cycle continues to deepen across India’s major office markets.
