India’s office market recorded a historic 43 million sq. ft. of gross leasing in H1 2026, up 5% year-on-year despite global uncertainty. GCCs and flexible workspace operators led demand, while lower new supply pushed vacancy to post-pandemic lows, strengthening rental growth and reinforcing confidence in India’s commercial real estate sector.
India’s commercial office market delivered its strongest first-half performance on record in H1 2026, proving that occupier demand remains resilient despite ongoing global economic and geopolitical challenges. According to Cushman & Wakefield, gross leasing volume (GLV) across the country’s eight largest office markets reached nearly 43 million square feet, representing a 5% year-on-year increase. The record-breaking performance highlights India’s growing importance as a global business destination, supported by its skilled workforce, expanding corporate ecosystem, and increasing demand for premium office spaces.
The impressive leasing activity reflects long-term confidence from domestic and multinational occupiers, even as businesses worldwide remain cautious about expansion. India’s commercial real estate sector continues to benefit from structural demand rather than short-term market cycles, positioning the country as one of Asia’s strongest office markets.
GCCs Continue to Shape Office Demand
Global Capability Centres (GCCs) remained the biggest growth driver during the first half of the year. The segment leased 16.5 million square feet, marking a 38% year-on-year increase and accounting for 38% of total office leasing nationwide.
Bengaluru led GCC activity with more than 5.3 million square feet of leasing, followed by Pune, Delhi-NCR, Mumbai, Hyderabad, and Chennai. Beyond GCCs, office demand also remained diversified across industries. The IT-BPM sector accounted for 22% of leasing activity, while banking and financial services (BFSI) contributed 19%, followed by engineering and manufacturing at 16%.
Commenting on the market, Anshul Jain, Chief Executive, India, SEA, MEA & APAC Office and Retail at Cushman & Wakefield, said, “The robust leasing activity during the first half of 2026 reinforces the structural strength of India’s office market.”
He added, “Organisations continue to make long-term commitments to India, reflecting confidence in the country’s talent ecosystem, business environment and long-term growth potential.”
Flexible Workspace Operators Set Another Record
Flexible workspace providers also delivered their strongest half-year performance to date. The segment leased 8.4 million square feet during H1 2026, recording an impressive 55% annual growth.
The surge reflects changing workplace strategies as enterprises increasingly adopt managed offices and hybrid work models that offer greater flexibility and scalability. Demand from startups, multinational companies, and large enterprises continues to accelerate the expansion of coworking and managed office operators across India’s leading commercial hubs.
This trend further reinforces the growing role of flexible workspaces within the broader commercial real estate ecosystem, making them an essential part of corporate workplace strategies.
Lower Supply Tightens Vacancy and Lifts Rentals
While demand remained exceptionally strong, the supply of new office space slowed. Around 21 million square feet of office space was completed during H1 2026, representing a 10% decline compared to the previous year.
The limited supply pushed pan-India vacancy down to 13.7%, the lowest level since the pandemic and the twelfth consecutive quarter of vacancy compression. As a result, rental values continued to rise across several cities, including Chennai, Mumbai, Hyderabad, and Ahmedabad.
According to Veera Babu, Executive Managing Director, Tenant Representation – India, Cushman & Wakefield, “There is an active demand of around 80 million sq. ft in the market and, with vacancy levels falling to their lowest point since the pandemic, occupiers are increasingly evaluating space requirements well in advance.”
Strong Outlook for the Second Half of 2026
Looking ahead, the market is expected to remain active, with more than 35 million square feet of new office space scheduled for completion in the second half of the year. The additional supply is expected to ease availability constraints while supporting continued leasing momentum.
For India’s coworking, managed office, and commercial real estate sectors, the latest data sends a clear message: demand remains fundamentally strong. With GCC expansion, enterprise hiring, and flexible workspace adoption continuing to accelerate, India’s office market is well-positioned to sustain its growth through the remainder of 2026, despite ongoing global uncertainties.
