Bengaluru’s office leasing declined 21% to 9.37 million sq. ft. in H1 2026 due to slower corporate decision-making amid global uncertainty. However, India’s office market remained stable, with GCCs accounting for 41.7% of leasing activity, while coworking operators achieved a record 10.23 million sq. ft. of space absorption.
India’s largest office market, Bengaluru, recorded a slowdown in leasing activity during the first half of 2026, reflecting the cautious approach many businesses are taking amid global economic uncertainty. According to JLL India, gross office leasing in the city stood at 9.37 million sq. ft. between January and June, a 21% decline from 11.79 million sq. ft. during the same period last year.
The consultancy attributed the decline primarily to delayed corporate decision-making as companies reassess expansion strategies in response to evolving geopolitical conditions and rapid technological transformation. Gross leasing, which includes all completed lease transactions and confirmed pre-commitments but excludes renewals, also fell 4% nationwide, to 37.90 million sq. ft. across seven major cities, down from 39.45 million sq. ft. a year earlier.
Mixed Performance Across Major Cities
While Bengaluru, Delhi-NCR, and Kolkata witnessed lower leasing volumes, several other office markets delivered positive growth. Hyderabad recorded an 18% increase in office leasing, Mumbai grew by 18%, Pune registered the strongest performance with a 23% rise, and Chennai posted modest growth of 2%.
The varied performance indicates that occupier demand remains healthy, although expansion is becoming more selective. Businesses are increasingly prioritising locations that offer access to skilled talent, modern Grade A office infrastructure, and operational flexibility. This trend continues to benefit cities with strong technology ecosystems and growing corporate presence.
GCCs and Coworking Continue to Shape Demand
Despite softer leasing in some markets, JLL believes India’s office sector continues to demonstrate long-term resilience. The report noted, “India’s office market demonstrates maturity as global occupiers take a measured approach amid AI-driven business transformation and evolving geopolitical dynamics.”
A major growth driver continues to be Global Capability Centres (GCCs), which accounted for 41.7% of total leasing activity during H1 2026. Commenting on the trend, Radha Dhir, Chief Executive Officer, India, JLL, said, “There is a fundamental transformation we are witnessing in India’s office market, and Global Capability Centres (GCCs) seem to be driving this.”
She added that GCCs continue expanding across sectors by leveraging India’s expertise in artificial intelligence, data science, digital engineering, analytics, and product development. Growth is no longer limited to technology companies, with increasing demand also coming from BFSI, manufacturing, retail, logistics, infrastructure, and aerospace organisations.
Flexible Workspaces Gain Strong Momentum
Another standout trend in the report is the continued rise of flexible workspaces. According to JLL, coworking operators leased a record 10.23 million sq. ft. during the first half of 2026, reflecting strong demand from enterprises seeking agile and scalable office solutions.
As hybrid work becomes a permanent feature of corporate real estate strategies, flexible workspace providers are playing an increasingly important role in meeting enterprise requirements. While Bengaluru’s leasing slowdown highlights the impact of short-term global uncertainty, strong GCC activity and record coworking demand indicate that India’s commercial office market remains fundamentally healthy. The combination of premium office demand, expanding adoption of flexible workspace, and continued corporate investment is expected to support long-term growth across the country’s office real estate sector.
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