This marks the 11th consecutive quarter of declining vacancy, signalling a clear shift towards a landlord-driven market.

Why Vacancy Is Falling

The sharp drop in vacancy is being driven by two key factors:

• Strong leasing demand across sectors
• Significant slowdown in new office supply

New office completions stood at just 8.8 million sq ft in Q1 2026, showing a 43% drop quarter-on-quarter and 18% decline year-on-year, mainly due to project delays.

At the same time, leasing activity remained robust, tightening the availability of quality office space.

City-wise Trends: Bengaluru & Mumbai Lead

Some cities are already witnessing extremely tight office markets:

• Bengaluru: Vacancy at just 7.81%, with some micro-markets as low as 2%
• Mumbai: Vacancy down to 9.21%, with prime areas below 3%
• Chennai, Pune, Kolkata: Continued decline in vacancy levels

On the other hand:

• Hyderabad: 20.22% vacancy
• Delhi NCR: 19.03% vacancy
• Ahmedabad: Highest at 30.16%

This shows that while demand is strong overall, premium locations are getting tighter much faster.

Rents Cross ₹100/sq ft for First Time

With vacancy shrinking, rents are rising:

• Average rents crossed ₹100 per sq ft/month for the first time
• Hyderabad: ~12% annual growth
• Delhi NCR: ~10% growth
• Mumbai & Chennai: ~6% growth

This indicates that landlords are gaining pricing power, especially in high-demand micro-markets.

Leasing Activity Remains Strong

Total leasing activity (Gross Leasing Volume) stood at:

• ~22 million sq ft in Q1 2026
• 13% growth year-on-year

Top Performing Cities:

• Mumbai: 6.6 MSF (highest ever quarterly leasing)
• Bengaluru: 5.13 MSF
• Hyderabad: 3.15 MSF
• Delhi NCR: 2.80 MSF

Mumbai stood out with record leasing, largely driven by renewal deals and strong occupier demand.

Who Is Driving Demand?

The biggest demand driver continues to be Global Capability Centres (GCCs):

• Leased ~8.7 million sq ft
• Accounted for ~40% of total demand
• Recorded 38% YoY growth

Sector-wise Demand:

• IT-BPM: 23%
• BFSI: 21%
• Flexible workspaces: 18%
• Engineering & manufacturing: 15%

This shows a diversified demand base, reducing reliance on a single sector.

Supply-Demand Gap Widens

Even though demand is strong, net absorption dropped to 11.51 MSF:

• ↓28% QoQ
• ↓24% YoY

This is mainly because new supply is not getting completed fast enough, delaying occupancy of pre-leased spaces.

What Lies Ahead for 2026

Experts believe:

• Around 61 million sq ft of new supply may enter the market in 2026
• Much of it will be premium Grade A+ office space
• Vacancy may ease slightly, but remain tight overall

However, global uncertainties like the West Asia crisis could slow down expansion plans in the short term.

What This Means (Simple Takeaway)

• Office demand in India is strong
• Supply is limited, creating a shortage
• Vacancy is falling and rents are rising
• Premium office spaces are becoming harder to find

This clearly signals a landlord-favourable market, especially in top business districts.

Also Read: Hiring Wave Ahead: Office Space Demand Soars

The post Office Vacancy Falls to 13.85%, Lowest Since 2020: Demand Surges While Supply Shrinks appeared first on Square Feat India.

This marks a notable evolution in the country’s commercial real estate landscape, where businesses are increasingly moving beyond metros in search of scalable and cost-efficient alternatives.

Tier-2 Cities Gain Ground in Flex Office Market

The report highlights that Tier-2 cities collectively account for:

• 575+ flex workspace centres
• ~29% share of total flex centres in India
• 8.8 Mn sq ft of flex stock (~9% pan-India share)

This growth reflects a broader decentralisation trend, as companies look to reduce dependence on saturated metro markets.

City-wise Flex Space Distribution

Among Tier-2 cities, flex space supply is led by:

• Ahmedabad – 22.7% share
• Kochi – 10.2%
• Indore – 10.1%
• Jaipur – 8.5%
• Coimbatore – 8.3%
• Lucknow – 7.6%
• Mangaluru – 6.3%
• Chandigarh – 4.9%
• Bhubaneswar – 4.3%
• Dehradun – 4.0%
• Other cities (Vadodara, Surat, Vizag, etc.) – 13.1%

This spread indicates that flex workspace demand is no longer limited to a handful of cities but is broad-based across emerging urban corridors.

Cost Advantage Driving GCC Expansion

One of the biggest drivers of this shift is cost arbitrage, with Tier-2 cities offering:

• Up to 50% lower occupancy costs compared to metro cities
• Access to skilled talent pools
• Reduced operational expenses

As a result:

• 200+ companies have established
• 300+ Global Capability Centres (GCCs) across Tier-2 cities

Key sectors driving this demand include:

• IT-ITeS
• Consulting services
• BFSI
• Engineering & manufacturing

Flex Spaces Becoming Preferred Choice for GCCs

While GCCs are not the dominant occupiers of flex spaces, their presence is steadily increasing:

• ~9% of flex centres in Tier-2 cities cater to GCC-led operations
• 16% of GCC bases operate out of flex workspaces

This signals a growing preference for flexible, scalable office models among global firms entering smaller cities.

Quality & ESG Shift in Tier-2 Office Market

Interestingly, the report highlights a quality gap and opportunity in Tier-2 markets:

• Only 60% of flex centres are in dedicated office buildings
• Just 26% are in Grade-A assets

However, GCC occupiers are setting higher benchmarks:

• 53% of GCC-occupied flex centres are in Grade-A buildings
• 19% operate from green-certified spaces

This indicates that demand for premium, ESG-compliant office spaces will be a key growth driver going forward.

The Bigger Trend: Decentralisation of India’s Office Market

According to Shrinivas Rao, CEO of Vestian:

“The rise of Tier-2 cities is a defining shift in India’s expansion strategy. As infrastructure improves and flex ecosystems mature, the decentralization of GCCs will become a cornerstone of the Viksit Bharat 2047 vision.”

What This Means for Real Estate

For developers, investors, and occupiers, this trend has clear implications:

• New investment hotspots emerging beyond metros
• Rising demand for Grade-A office assets in Tier-2 cities
• Flex operators scaling aggressively in non-metro markets
• Strong linkage between infrastructure growth and commercial real estate demand

As metros face saturation, Tier-2 cities are not just alternatives anymore—they are becoming core to India’s office market expansion story.

Also Read: Flex Spaces to Play Major Role in Office Expansion, Survey Reveals

The post Flex Stock in Tier-2 Cities Hits ~9 Mn Sq Ft, Accounts for 9% of India’s Total appeared first on Square Feat India.

The report highlights that multinational corporations—especially from the United States, Europe, and the United Kingdom—are increasingly using India not just as a cost-efficient outsourcing hub but as a strategic base for innovation, research, and advanced operations. This structural shift is expected to significantly boost leasing activity across India’s top seven office markets: Bengaluru, Mumbai, Delhi-NCR, Hyderabad, Chennai, Pune, and Kolkata.

Strong Economic Tailwinds Supporting Growth

India’s macroeconomic outlook is reinforcing investor confidence. The International Monetary Fund recently revised the country’s 2026 GDP growth forecast upward from 6.1% to 6.3%, while projecting 6.5% growth for 2027. Analysts attribute this to robust domestic demand and progress on bilateral trade agreements with key economies such as the US, EU, UK, and France.

These agreements—covering tariff reductions, improved market access, and sector-specific policy easing—are expected to strengthen India’s export competitiveness and encourage foreign companies to scale up their operations locally. Sectors expected to benefit the most include:

• Technology & digital services
• Banking, Financial Services and Insurance (BFSI)
• Engineering & manufacturing
• Consulting and professional services

GCC Leasing on Track to Hit 40 Million Sq Ft Annually

According to Arpit Mehrotra, Managing Director, Office Services at Colliers India, GCC leasing could soon reach 35–40 million sq ft annually, accounting for 40–50% of total office demand.

Since 2020, GCCs have leased about 117 million sq ft, or roughly 38% of India’s total Grade A office absorption. Their annual uptake has nearly doubled—from about 16 million sq ft in 2020 to nearly 30 million sq ft in 2025—reflecting sustained expansion.

US-headquartered firms have dominated activity, contributing nearly 70% of GCC leasing since 2020. However, this dominance is expected to moderate as European and British firms expand their presence.

Distinct Regional Demand Patterns Emerging

The report identifies differing sector preferences among GCC investors:

• US companies: Technology-led demand (47%), followed by BFSI (21%)
• EU companies: Strongly anchored in engineering & manufacturing (~60%)
• UK companies: More diversified, led by BFSI (29%) and consulting (23%)

These trends indicate a broadening occupier mix, reducing reliance on a single sector and strengthening market resilience.

Trade Deals to Accelerate Office Expansion

Tariff reductions and market access provisions under proposed trade agreements are expected to spur corporate expansion. Examples cited include:

• Potential elimination of tariffs on US industrial goods
• EU tariff cuts on machinery, steel, chemicals, and pharmaceuticals
• Reduced auto duties under quota systems for multiple partners

Such measures could make India more attractive as both a manufacturing base and services hub, prompting multinational firms to establish or enlarge capability centres.

From Back Offices to Innovation Hubs

“GCCs will continue to anchor India’s office demand and support diversification of occupiers,” said Vimal Nadar, National Director and Head of Research at Colliers India. He added that while technology will remain a key driver, BFSI and engineering firms could together account for 40–50% of leasing demand in 2026.

This transformation reflects a broader shift: GCCs are no longer transactional support units but high-value hubs handling product development, AI, analytics, and engineering functions. India’s deep talent pool and cost advantages continue to reinforce its appeal as a global operations base.

Also Read: South India’s Data Centre Market to Witness 65% Capacity Growth by 2030

The post GCC Boom Set to Power India’s Office Market: Global Firms May Drive Up to 50% Demand Surge appeared first on Square Feat India.

The report reveals that by the end of 2024, India already had more than 1,700 GCCs employing over 1.9 million professionals, with the GCC market size surging from USD 30 billion in 2019 to approximately USD 64 billion in 2024. By 2030, the market is expected to nearly double to USD 105–110 billion, growing at a CAGR of 10%.

Anuj Puri, Chairman – ANAROCK Group, said: “India’s GCC landscape has expanded rapidly, fuelled by demand from IT/ITeS, BFSI, Healthcare & Life Sciences, and Engineering R&D. The sector’s ability to attract and retain global talent, combined with India’s cost efficiency and skilled workforce, continues to drive demand for premium office spaces. The footprint is now rapidly expanding beyond the top 7 cities into Tier-2 hubs like Jaipur, Indore, Surat, Kochi, and Coimbatore — these cities are emerging as the next big GCC growth frontiers.”

GCCs Power Record Office Leasing in 2025

The report highlights the outsized role GCCs played in India’s office market resilience amid global headwinds:

• In 2025, total gross office leasing across the top 7 cities reached an all-time high of 80.5 million sq. ft. — with GCCs alone accounting for over 32.5 million sq. ft. (more than 40% of total leasing).
• Bengaluru remains the undisputed leader, hosting over 875 GCC centres (29% of India’s total) and capturing more than one-third of the country’s GCC leasing in 2025.
• Pune followed with 15% share, while Delhi-NCR and Hyderabad each contributed 14%.

Grade A Office Stock & Supply Dynamics

• Grade A office stock across the top 7 cities now stands at approximately 800 million sq. ft., with Bengaluru and NCR together accounting for nearly 50% of the total supply.
• New office completions in 2025 exceeded 51 million sq. ft. — an 8% increase over 2024.
• Southern markets (led by Bengaluru, Hyderabad, Chennai) dominated the supply pipeline, contributing around 51% of new additions.
• Net absorption in 2025 crossed 58 million sq. ft., underscoring sustained occupier demand.

Raj Menda, Chairman – FICCI Committee on Urban Development and Real Estate & Chairman of Supervisory Board, RMZ Corp, remarked: “For three decades, India’s office real estate was seen as a cost line to be managed. Today, it is a strategic lever — shaping where global capital flows, where high-value jobs are created, and where India’s young workforce chooses to live. Grade A buildings are no longer just concrete and glass; they are operating systems for productivity, culture, technology, and climate resilience.”

Indian REITs: Still Early Days, Massive Headroom

Despite rapid progress since the first REIT listing in 2019, India’s REIT market remains under-penetrated:

• Five listed REITs have achieved a market capitalization of nearly USD 18 billion.
• REITs currently represent only ~20% of total institutional real estate.
• Out of 520 million sq. ft. of REITable office stock, only about 165 million sq. ft. is listed — leaving significant headroom for institutionalisation.
• Future growth will come from diversification into data centres, logistics parks, and retail malls.
• Residential REITs may take longer due to regulatory and market complexities, but progress is expected over time.
• With policy support and rising institutional participation, REIT penetration could rise to 25–30% by 2030, positioning India among the world’s fastest-growing REIT ecosystems.

Broader Economic & Policy Tailwinds

• FDI inflows rose to a provisional USD 81.04 billion in FY 2024–25 — a 14% increase from USD 71.28 billion in FY 2023–24.
• Demand is diversifying: coworking (23%), BFSI (18%), consultancy, and manufacturing are gaining share alongside IT/ITeS.
• Proactive state-level GCC policies and central government support continue to strengthen India’s position as a preferred global delivery hub.

The Big Picture

India’s office market in 2025 proved remarkably resilient — posting record leasing, strong supply addition, and deepening institutionalisation through REITs. GCCs are no longer just cost centres; they are high-value job engines, talent magnets, and anchors of premium office demand — increasingly spreading to Tier-2 cities and reshaping urban India.

With 2,400+ GCCs and 2.8 million jobs projected by 2030, India is firmly decoding the future of global work and commercial real estate.

Also Read: India to Lead APAC Office Market Growth in 2026 Driven by Strong GCC Demand

The post India’s GCC Boom: 2,400 Centres, 2.8 Million Jobs by 2030 appeared first on Square Feat India.

This trend is rapidly reshaping India’s flex office market, pushing operators to upgrade quality, location, and sustainability standards.

What Are GCCs and Why Do They Matter?

GCCs are global companies’ offshore centres that handle critical business functions such as IT, R&D, finance, and operations. Over the past few years, India has emerged as a top destination for these centres due to skilled talent, cost efficiency, and a large domestic market.

As of 2025:

• India hosts 1,750+ GCC companies
• Operating from nearly 3,800 locations
• GCCs accounted for over 40% of total office space demand in the last two years

Their scale and long-term presence make GCCs one of the most influential occupiers in India’s office market today.

Flex Offices Become the Preferred Choice

Flexible workspaces — which offer plug-and-play offices with shorter leases and scalability — are increasingly preferred by GCCs, especially during expansion and pilot phases.

Key highlights:

• 475+ flex centres currently host GCC bases
• These centres are spread across major Tier-1 cities
• Flex operators benefit from GCCs’ need for speed, flexibility, and enterprise-grade infrastructure

This growing reliance has made GCCs a driving force behind the premiumisation of flex offices.

GCCs Push Green and Grade-A Office Adoption

Vestian’s data shows a clear quality gap between overall flex stock and GCC-occupied flex spaces:

• 42% of all flex centres are green-certified
• 62% of GCC flex bases operate from green-certified centres

Similarly:

• 69% of flex centres are located in Grade-A buildings
• 85% of GCC flex bases operate from Grade-A buildings

In simple terms, GCCs demand better buildings than the average flex user, forcing operators to upgrade.

Which Cities Are Leading the Green Flex Trend?

City-wise data shows strong adoption of premium flex spaces by GCCs:

• Mumbai: 98% of GCC flex bases are in Grade-A buildings
• Hyderabad: 94% in Grade-A, 72% in green-certified centres
• NCR: 81% of GCC flex bases operate from green-certified centres
• Bengaluru: Leads in absolute flex stock and GCC presence

Interestingly, Kolkata has the highest share of green-certified flex centres overall, but GCC adoption there remains limited compared to larger IT hubs.

Why GCCs Prefer Peripheral Business Districts

Rather than expensive central business districts, GCCs are increasingly choosing Peripheral Business Districts (PBDs).

Why?

• Better connectivity
• Lower rentals
• Larger office campuses
• Easier scalability for future expansion

As a result:

• 77% of flex space occupied by GCCs is located in peripheral zones
• Compared to 61% of overall flex stock

This shift is helping develop new office corridors across major cities.

India’s Flex Office Market Is Growing Fast

India’s flex workspace market has scaled rapidly:

• 82.3 million sq ft of flex space
• Spread across 1,400 centres
• Top 10 operators control 67% of total stock

City-wise flex stock share:

• Bengaluru: 33.2%
• NCR: 20.4%
• Pune: 14.7%
• Hyderabad: 12.4%

With rising GCC demand, India’s flex stock is projected to cross 100 million sq ft by 2026.

What This Means for India’s Office Market

Experts believe flex operators will play a central role in India’s GCC growth story.

According to Vestian CEO Shrinivas Rao, flex spaces offer global companies:

• Faster market entry
• Operational flexibility
• Enterprise-grade and compliant infrastructure

With India’s economy expected to grow over 7% in FY26, and global companies increasingly prioritising sustainability and agility, flex workspaces are well positioned to become a core part of India’s office ecosystem, not just a temporary solution.

Also Read: Flex Office Stock to Cross 100 Million Sq Ft by 2027; Penetration to Exceed 10%

The post Why Global Companies Are Choosing Green Offices in India’s Flex Workspaces appeared first on Square Feat India.

India has emerged as a powerhouse of technology talent, with six Indian cities ranking among the top 10 Asia Pacific (APAC) markets for tech talent acquisition, according to Colliers’ latest report, Global Tech Markets: Top Talent Locations 2025. This surge in skilled workforce is reshaping India’s real estate landscape, driving unprecedented demand for Grade A office space across the country’s top seven cities.

“India is a key player in the global innovation ecosystem, with Bengaluru and Hyderabad continuing to lead the way in tech-driven office leasing,” said Arpit Mehrotra, Managing Director, Office Services, India, Colliers.

India’s Talent Edge: Six Cities in APAC Top 10

The report highlights that Bengaluru, Hyderabad, Chennai, Pune, Mumbai, and Delhi-NCR now dominate tech hiring in APAC, offering a combination of cost competitiveness, skilled talent pools, and established IT infrastructure.

BOX: India’s Leading Tech Talent Cities

• Bengaluru: World’s largest pool of data scientists
• Hyderabad: Fastest-growing tech workforce in India
• Chennai: Strong AI and cybersecurity talent
• Pune: Innovation in enterprise solutions
• Mumbai: Fintech and digital transformation hub
• Delhi-NCR: Emerging as a strategic GCC base

Tech Sector Powers Office Leasing

During H1 2025, technology occupiers leased over 10 million sq ft of office space in India’s top 7 cities, accounting for 40% of conventional leasing. Notably, Bengaluru and Hyderabad together contributed nearly 50% of this activity.

TABLE: Office Gross Leasing Trends by Technology Sector

Source: Colliers

GCCs Driving Real Estate Momentum

India has also solidified its position as a global hub for Global Capability Centers (GCCs). In the first half of 2025 alone, tech GCCs leased 5.2 million sq ft, representing 41% of total GCC leasing. Bengaluru, Delhi-NCR, and Hyderabad together accounted for over 85% of this demand.

“GCCs in India have evolved into strategic innovation hubs, accelerating demand for high-quality office space,” said Vimal Nadar, National Director & Head of Research, Colliers India.

Emerging Trends: Younger Workforce & Flex Spaces

The report reveals a structural shift in workforce demographics:

• Workers under 25 years in tech have increased by 9% between 2014–2022, growing 20 times faster than the all-industry average.
• This trend is making cities like Bengaluru, Hyderabad, and Pune particularly attractive to companies seeking a young, dynamic workforce.

Additionally, flex spaces are witnessing strong traction from tech occupiers, with nearly 50% of flex demand in H1 2025 driven by technology firms.

Expert View

“Asia Pacific is drawing unprecedented global attention for its unmatched tech talent density, and India is at the center of this transformation,” said Mike Davis, Managing Director, Office Services, Asia Pacific, Colliers.

“Bengaluru and Hyderabad are no longer just back-office hubs – they are innovation powerhouses fuelling the next phase of India’s economic expansion.”

The Road Ahead

With venture capital funding surging, a deep talent pipeline, and cost competitiveness, India’s office markets are expected to remain among the world’s top destinations for technology-led growth. As global firms continue to scale and innovate, Indian cities are poised to lead the next wave of real estate expansion across the Asia Pacific.

BOX: Quick Facts — India’s Tech Real Estate in 2025

• Tech Share of Conventional Leasing: 40%
• Top Leasing Cities: Bengaluru, Hyderabad, Delhi-NCR
• Flex Space Demand: 50% driven by tech
• Young Workforce Surge: +9% under-25 talent in a decade
• GCC Contribution: 41% of GCC leasing from tech firms

Also Read: Bengaluru’s Tech Boom Fuels Commercial Real Estate Demand

The post India Among Top Global Tech Talent Hubs, Fuels Real Estate Surge appeared first on Square Feat India.

Macro View (Top 7 Cities vs High‑Activity Markets)

Source: Colliers Research

Top 15 High‑Activity Micro Markets

Green micro markets indicate sub‑dollar rentals (~ INR 90/sf/mo).

Why These Markets Matter

• Demand & Supply Scale: Each micro market averages ≥ 1 msf annual demand and supply; collectively forecast to drive 80%+ of India’s future office activity.
• REIT Potential: With 488 msf REIT-worthy nationally, 56% lies within top 10 micro markets, and 72% of their Grade A stock is ready for REIT listings.
• Financial Hubs: Flexible workspace (flex) uptake in these areas soared from 1.3 msf (2020) to 7.3 msf (2024) at a CAGR of 54%; 73% of GCC leasing (~70 msf) also centered here.
• Rental & Vacancy Benefits: Premium rental zones in Mumbai and Delhi NCR enjoy sub-10% vacancies—well below ~16% national average.
• Sustainability Edge: Green-certified offices are gaining preference, providing higher occupancy and yield.

Expert Opinions

“Annual demand and supply in each of these high-activity micro markets is likely to exceed one million sq ft…”
— Arpit Mehrotra, MD, Office Services, Colliers India

“These zones will lean toward landlord-favorable terms and attract premium and green-certified developments.”
— Vimal Nadar, National Director & Head of Research, Colliers India

Mini Insights Box

• Micro Markets Count: 15 across 7 cities
• Rent Types: ~60% are near or sub‑dollar
• Flex Space Demand: 59% of national uptake in top 10 zones
• GCC Focus: 73% of leasing in top 10 markets
• REIT-Ready Inventory: 72% readiness in top 10 micro markets

Outlook

India’s office landscape is reshaping around these high-activity micro markets, which offer scale, value, and investor appeal. With sustained growth, REIT upside, flex trends, and green adoption, these zones are set to define the future of India’s commercial real estate.

Also Read: Indian office real estate performs better in Asia Pacific.

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