The report, titled “2026 India Office: Unlocking Agility, Vitality and Flight-to-Quality,” highlights that the sector’s growth will be driven by a diversified occupier base, rising institutional investment, and evolving workplace strategies.

Strong Growth Trajectory Ahead

India’s Grade A office stock is expected to expand significantly over the next few years. From 847.1 million sq ft in 2025, total stock is projected to reach 900–920 million sq ft in 2026, and further cross 1.1–1.2 billion sq ft by 2030.

At the same time:

• Demand is expected to grow to 90–100 million sq ft annually by 2030
• Supply could reach 75–85 million sq ft annually by 2030
• Vacancy levels are likely to decline to ~15% in 2026 and further to 13–14% by 2030
• Office rentals are projected to rise from ₹108.8 per sq ft/month in 2025 to ₹110–115 in 2026, and ₹120–130 by 2030

This reflects sustained occupier confidence and continued developer activity despite global economic uncertainties.

Bengaluru to Lead, Hyderabad and Delhi-NCR Strong

Among India’s top office markets, Bengaluru is expected to dominate in 2026, accounting for nearly one-third of total leasing activity and supply.

Other key cities will also see strong performance:

• Delhi NCR and Hyderabad are each expected to record over 10 million sq ft of demand and supply
• Mumbai is projected to see 9–10 million sq ft demand and 5–7 million sq ft supply
• Pune and Chennai will continue steady growth
• Kolkata is expected to witness a gradual uptick in activity

GCCs to Drive Nearly Half of Leasing

Global Capability Centers (GCCs) are emerging as the biggest growth drivers for India’s office market.

• GCC leasing is expected to reach 30–35 million sq ft in 2026
• This will account for 40–50% of total office demand

GCCs are increasingly evolving into innovation-driven hubs across sectors such as technology, BFSI, and engineering. Their preference for scalable and flexible office setups is pushing developers to create modular and plug-and-play workspaces.

Flex Spaces Gain Momentum

Flexible workspace operators are expected to play a significant role in shaping office demand:

• Annual leasing by flex operators is projected at 15–18 million sq ft in 2026
• This will account for 20–25% of total leasing activity

India’s total flex office stock is expected to reach 85–90 million sq ft by 2026, and surpass 100 million sq ft by 2027, reflecting the growing adoption of hybrid work models and demand for flexible leasing options.

REITs to Expand Commercial Real Estate Participation

The report also highlights the increasing role of Real Estate Investment Trusts (REITs) in India’s office market.

• Around 525 million sq ft of Grade A office stock is currently REIT-worthy
• Of this, 141 million sq ft is already listed under four REITs
• The remaining 384 million sq ft holds potential for future REIT listings

As a result, REIT penetration is expected to cross 20% in the coming years, improving liquidity and enabling wider retail investor participation in commercial real estate.

Sustainability and Tech to Define Future Workspaces

Sustainability and technology integration are set to become key differentiators in the office market:

• Over 80% of new office supply in 2026 is expected to be green-certified
• Green buildings could account for 70–75% of total stock
• Around 80% of leasing activity will be concentrated in green-certified buildings

Developers are increasingly focusing on:

• ESG-compliant designs
• Renewable energy integration
• Climate-resilient infrastructure
• Smart, tech-enabled buildings

Additionally, more than 420 million sq ft of older office stock (over 10 years old) presents a retrofit opportunity worth over ₹500 billion, indicating strong investment potential in upgrading existing assets.

Positive Outlook Despite Global Uncertainty

According to Arpit Mehrotra, India’s office market is entering a “future-ready cycle of structural growth,” driven by GCC expansion, flex space adoption, and a broadening occupier base.

Vimal Nadar added that ESG compliance and digital infrastructure will increasingly influence asset valuations and investor preferences.

Overall, India’s office market is expected to remain one of the most resilient globally, supported by strong fundamentals, cost advantages, and a growing talent pool.

Also Read: Mumbai’s Real Estate Market Healing: Property Registrations Catch Steam in February 2026

The post India Office Market to See 70–75 mn sq ft Demand in 2026, Supply at 60–65 mn sq ft appeared first on Square Feat India.

While office markets across APAC are showing early signs of stabilisation after nearly two years of rental declines, India stands out as the region’s key growth engine. Prime office rents in major Indian cities are forecast to rise 7–10% year-on-year in 2026, significantly outperforming most regional peers.

Record Leasing Activity Across India’s Top Office Markets

India’s three largest office markets—Bengaluru, Mumbai, and Delhi-NCR—together recorded nearly 50 million sq ft of leasing in 2025, marking a 21% year-on-year increase and the highest annual absorption ever across these cities.

• Bengaluru led the region, registering 13.8% annual prime rental growth in 2025
• Prime rents in Bengaluru rose 7.4% quarter-on-quarter in Q4 2025, the strongest among all tracked APAC cities
• Mumbai and Delhi-NCR posted their second-highest leasing levels, just behind 2024

Beyond GCCs, leasing demand was supported by flex office operators, IT outsourcing firms, and financial services companies, resulting in 5.8% year-on-year rental growth across key Indian markets in 2025.

India Defies Regional Supply Pressures

Across the Asia-Pacific region, over 100 million sq ft of new office supply is expected to come online in 2026, potentially pushing vacancy levels higher and limiting rental upside in several markets.

In contrast, India is expected to add around 43 million sq ft of fresh office supply in 2026, a volume that Knight Frank believes can be absorbed without materially weakening rental momentum.

A pronounced flight-to-quality trend is further strengthening India’s office fundamentals, with occupiers increasingly favouring:

• ESG-compliant buildings
• Flexible and future-ready office layouts
• Prime locations that support talent attraction and productivity

India’s Office Market Enters a Structurally Strong Phase

Commenting on the outlook, Shishir Baijal, International Partner, Chairman and Managing Director, Knight Frank India, said:

“India’s office market has decisively moved into a phase of structurally stronger demand with gross absorption surpassing last year’s peak by 20%, closing at 86.4 million sq ft for the top eight cities. Global Capability Centres, third-party IT businesses and financial services firms are not only expanding but also committing early to high-quality developments. This confidence reflects India’s growing role in global business ecosystems.”

He added that strong occupier demand in 2026, coupled with higher supply volumes, will continue to support market traction, making India one of the most compelling office markets globally for both occupiers and investors.

Medium-Term Outlook Remains Positive

Knight Frank notes that office supply across Asia-Pacific is expected to decline sharply from 2027 onwards, tightening the availability of quality spaces. Against this backdrop, India’s current cycle of strong pre-leasing activity, improving asset quality, and sustained occupier confidence positions it favourably for medium-term rental growth and capital value appreciation.

Tim Armstrong, Global Head of Occupier Strategy and Solutions, Knight Frank, said:

“While the region’s growth fundamentals remain strong, trade policy shifts will continue to create uncertainty in 2026. Rising costs and rapid technological change are pushing companies to rethink their real estate strategies. Securing adaptable, high-quality office space with a long-term view will be critical as occupiers balance cost optimisation with future growth.”

Key Highlights at a Glance

• India to lead APAC office growth in 2026
• Prime rents in India to rise 7–10% YoY
• 43 million sq ft of new office supply expected in 2026
• 50 million sq ft leased across Bengaluru, Mumbai & NCR in 2025
• GCCs remain the primary demand driver

Also Read: More Global Offices, More Jobs, More Homes: How GCC Expansion Will Shape India’s Housing Market

The post India to Lead APAC Office Market Growth in 2026 Driven by Strong GCC Demand appeared first on Square Feat India.