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India’s office market recorded a marginal 2 per cent decline in gross leasing during the first half of 2026, with leasing reaching 48 million square feet across the top eight office markets, according to Knight Frank India. While global economic and geopolitical uncertainties affected demand in some cities, leasing activity remained strong, supported by record absorption from Global Capability Centres (GCCs) and co-working operators. Rental values rose across most office markets due to lower vacancy levels, reflecting the continued strength of India’s commercial real estate sector despite a mixed performance across cities.
India’s top eight office markets recorded gross leasing of 48 million square feet during the first half of 2026, marking a 2 per cent decline compared to the record leasing levels seen in the corresponding period last year, according to real estate consultant Knight Frank India.
Speaking at a virtual press conference held this week, the consultant said the slight moderation in office leasing came amid global economic uncertainty, geopolitical tensions and changing business sentiment. Despite the decline, the overall office market continued to remain resilient, with strong occupier demand across several key markets.
The latest findings differ from reports released by other leading property consultants during the past week. CBRE had reported record gross office leasing of 45.5 million square feet during January-June 2026, while Cushman & Wakefield estimated leasing at 43 million square feet. Colliers India also reported a 6 per cent year-on-year increase, with gross leasing reaching 35.7 million square feet across the top seven cities during the same period.
Industry experts have attributed the variation in leasing numbers to differences in research methodology, market coverage and calculation parameters adopted by individual property consultants. Office leasing data is widely tracked as an important indicator of business expansion, corporate confidence and employment generation.
According to Knight Frank India, India's office market continued to perform steadily despite several global challenges. The consultant said sustained leasing activity was achieved even as businesses navigated geopolitical tensions, disruptions in global trade, the growing impact of artificial intelligence on workplaces and continued uncertainty across major international office markets.
City-wise, leasing activity declined in Bengaluru, Delhi-NCR, Chennai and Kolkata during the first half of 2026. In contrast, Mumbai, Pune and Hyderabad registered growth in office leasing, while Ahmedabad reported stable demand with no significant change from the previous year.
Global Capability Centres (GCCs) remained the biggest growth driver for India's office market. They accounted for a record 43 per cent of total office leasing during the first six months of 2026. GCCs leased 20.6 million square feet of office space during the period, up from 19.1 million square feet in the corresponding period last year.
Knight Frank India Chairman and Managing Director Shishir Baijal said the record share of leasing by GCCs, healthy demand across multiple office markets, declining vacancy levels and continued rental growth reflected the long-term strength of India's commercial real estate sector. He also noted that although global uncertainties could continue to influence business sentiment in the near term, the country's office market remains well positioned for sustained growth.
Flexible workspace operators also continued to expand their footprint. Co-working companies leased 11.4 million square feet of office space from developers during January-June 2026, compared with 10.8 million square feet in the same period last year, highlighting the continued demand for managed and flexible office solutions from occupiers.
Knight Frank further noted that rental values increased across seven of the eight major office markets during the first half of the year. Rental growth ranged between 3 per cent and 13 per cent, supported by healthy demand and falling vacancy levels. Mumbai was the only major office market where rentals remained unchanged during the period.
The office market has remained one of the strongest-performing segments of India's commercial real estate sector over the past few years, driven by expansion from technology firms, financial services companies, engineering and manufacturing businesses, life sciences companies and the continued growth of GCCs established by multinational corporations.
Source PTI
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