Global Capability Centres accounted for 45% of India’s office leasing in the first half of 2026, pushing rents up by 9%. Low supply is tightening the market, creating a strong preference for high-quality, green-certified office assets.
The Indian commercial real estate market is seeing a period of strong pricing power for landlords, driven primarily by the sustained expansion of Global Capability Centres (GCCs). In the first half of 2026, these centres occupied 19.2 million square feet of office space, representing 45% of the total gross leasing activity across the country. This surge in demand, combined with a 10% year-on-year contraction in new office supply to 22.2 million square feet, has tightened the market significantly.
National office vacancy rates have dropped to a multi-year low of 15%, reflecting a supply-demand imbalance that continues to support rental growth. On average, monthly rents across major Indian office markets have climbed 9% compared to the previous year, now averaging Rs 96 per square foot. Bengaluru remains the primary hub for this activity, capturing 39% of the national GCC demand.
While technology companies have historically dominated this space, the composition of occupiers is becoming more diverse. Recent leasing data shows that firms in banking, financial services (BFSI), engineering, and manufacturing are increasingly setting up or expanding their capability centres in India. This diversification reduces reliance on any single sector, potentially stabilizing demand patterns over the longer term.
For investors in the commercial real estate space, the market is exhibiting a clear bifurcation. There is a strong preference for institutional-grade assets that offer modern amenities and sustainability certifications. Green-certified buildings now account for 73% of total leasing activity, as multinational occupiers prioritize compliance and environmental standards. Consequently, older, non-institutional-grade properties may face higher vacancy risks as tenants migrate toward premium spaces that meet these evolving global standards.
Despite the positive leasing trends, the sector is not without risks. The pace of expansion by multinational corporations remains sensitive to global macroeconomic conditions and geopolitical uncertainties, which can impact hiring and office space requirements. Furthermore, while rent growth has been positive, construction costs—particularly for steel and other essential materials—could pressure project execution timelines for developers. The primary monitorable for the coming quarters will be how new project completions align with this sustained demand and whether the rental momentum persists amidst potential global economic volatility.