- GCCs lease 16.5 MSF in H1 2026, up ~38% YoY, accounting for 38% of office demand
- Flexible workspace operators record highest-ever half-yearly leasing volume of 8.4 MSF
- Pan-India vacancy tightens to 13.7% in Q2 2026, marking a post-pandemic low
India's office sector sustained its growth momentum in the first half of 2026, with gross leasing volume (GLV) reaching approximately 43 million square feet (MSF), the highest first-half leasing volume on record, despite prevailing global macroeconomic uncertainties. According to Cushman & Wakefield's Q2 2026 Office Market Beat Report, H1 leasing grew 5% year-on-year over H1 2025, reflecting resilient occupier demand underpinned by sustained expansion from Global Capability Centres (GCCs) and an increasingly diversified occupier base.
*GLV, factors in all leasing activity in the market, including fresh take-up, open market renewals by occupiers as well as pre-leasing, and is an indication of overall market activity.
Overall Gross Leasing Volume (GLV) across the top eight cities stood at approximately 21 MSF during Q2 2026, witnessing a marginal 1% moderation on both a quarter-on-quarter (QoQ) and year-on-year (YoY) basis. However, the H1 performance underscores the structural strength of India's office market and sustained occupier confidence amid an evolving global economic environment.
|
Gross Leasing Volume (MSF) |
H1 2025 |
H1 2026 |
YoY % change |
|
Mumbai |
8.2 |
10.7 |
30% |
|
Delhi NCR |
8.2 |
6.9 |
-16% |
|
Bengaluru |
9.7 |
10.3 |
7% |
|
Chennai |
4.1 |
2.9 |
-29% |
|
Pune |
5.5 |
5.3 |
-3% |
|
Hyderabad |
4.2 |
5.2 |
25% |
|
Kolkata |
0.8 |
0.8 |
-3% |
|
Ahmedabad |
0.2 |
0.8 |
244% |
|
PAN India |
40.9 |
43.0 |
5% |
Dominance of GCCs
GCCs remained the principal growth engine of India's office market, leasing approximately 16.5 MSF during H1 2026, accounting for 38% of total leasing activity and marking a robust ~38% YoY increase. The momentum remained strong in Q2 as GCC occupiers transacted nearly 8 MSF, contributing 37% of overall office leasing and reinforcing India's position as a preferred destination for Global Capability Centres.
The geographic footprint of GCC demand also continued to broaden during H1 2026. Bengaluru, Pune, Delhi NCR and Mumbai together accounted for nearly 80% of total GCC leasing during the first half of the year. While Bengaluru remained the country's largest GCC market with 5.36 MSF of leasing, Pune (3.01 MSF), Delhi NCR (2.37 MSF) and Mumbai (2.23 MSF) also witnessed strong demand. Hyderabad (1.63 MSF) and Chennai (1.50 MSF) continued to attract healthy GCC activity, highlighting how occupiers are increasingly expanding across multiple markets to access talent, build operational resilience and support long-term growth.
Sectoral trends
From a sectoral perspective, occupier demand continued to diversify in H1 2026. While IT-BPM remained the largest contributor to leasing activity with a 22% share, BFSI and Engineering & Manufacturing strengthened their presence, accounting for 19% and 16% of demand, respectively.
Flexible workspace operators continued to strengthen their portfolio in India’s office market, leasing 8.4 MSF, accounting for one-fifth of total leasing activity in H1-26. This marks a 55% YoY increase and the highest-ever half-yearly volume recorded by the segment. The continued momentum reflects occupiers' growing preference for agile workplace strategies and managed office solutions that offer greater flexibility while supporting evolving business needs.
Absorption trends
Net absorption across the top eight cities remained healthy at ~23 MSF in H1 2026, although moderating by 19.8% YoY. In Q2 2026, net absorption stood at 11.6 MSF, broadly in line with the previous quarter, while registering a 14.5% decline YoY. The moderation was largely influenced by lower supply additions and the constrained availability of new space during the period. Despite this, underlying occupier demand remained resilient, as reflected in sustained leasing activity and continued vacancy compression across key office markets. Bengaluru remained the largest contributor, accounting for nearly 30% of pan-India net absorption, followed by Pune and Hyderabad, contributing 15% each in H1.
*Net Absorption refers to the net change in occupied space within a given market over a specific period, calculated as the difference between occupied stock at the end of the current period and the previous period.
Supply, vacancy and rental growth
Supply additions across the top eight cities stood at approximately 21 MSF in H1 2026, reflecting a 10% YoY decline. The supply momentum in Q2 2026 saw a 40% QoQ increase, with new completions reaching ~12 MSF. As projects currently awaiting final approvals move toward completion, a healthy pipeline of more than 35 MSF is expected to enter the market during the second half of the year, providing additional options for occupiers amid sustained demand.
Pan-India vacancy declined further to 13.7% in Q2 2026, marking the twelfth consecutive quarter of vacancy compression and lowest vacancy levels recorded post-covid. The decline was driven by a combination of sustained leasing activity and lower-than-anticipated supply additions during the first half of the year, resulting in continued absorption of available vacant stock across key office markets.
Rental growth continued across all major office markets in Q2 2026. Chennai, Mumbai, Hyderabad and Ahmedabad led with rental appreciation of 2-3% QoQ.
Anshul Jain, Chief Executive – India, SEA, MEA & APAC Office and Retail, Cushman & Wakefield, commented
“The robust leasing activity during the first half of 2026 reinforces the structural strength of India's office market. While global macroeconomic and geopolitical uncertainties have led occupiers to adopt a more measured approach to decision-making, the underlying demand story remains firmly intact. Organisations continue to make long-term commitments to India, reflecting confidence in the country's talent ecosystem, business environment and long-term growth potential. Global Capability Centres continue to be at the heart of this momentum, with their expansion increasingly shaping demand across multiple office markets. At the same time, we are also beginning to see market conditions evolve from the supply side. Over the past couple of years, many developers prioritised residential development amid strong housing demand. However, with office vacancy tightening to post-pandemic lows, rental growth strengthening and demand remaining resilient, we expect commercial development activity to regain greater attention. A healthier supply pipeline will be critical in supporting the next phase of growth in India's office sector.”
Veera Babu, Executive Managing Director, Tenant Representation - India, Cushman & Wakefield, said:
“The first half of 2026 highlights a market where demand continues to outpace the availability of quality office space across several key locations. There is an active demand of ~80 MSF in the market and with vacancy levels falling to their lowest point since the pandemic, occupiers are increasingly evaluating space requirements well in advance, particularly in markets where availability of quality assets is becoming more constrained. As new supply enters the market over the second half of the year, occupiers will have greater access to quality office stock, which is expected to support stronger absorption across key markets. This combination of sustained demand and improving supply visibility is expected to drive continued momentum in India's office sector through the remainder of the year. ”
