India’s commercial real estate leasing volume reached 66.7 million square feet in the first nine months of 2026, matching last year's figures. While overall demand remains stable, the market is undergoing a structural shift, as Global Capability Centres (GCCs) increasingly replace traditional IT services as the primary growth driver, now accounting for 41% of total transactions.
The Indian office leasing market recorded a stable performance in the first nine months of 2026, with transaction volumes totaling 66.7 million square feet. This figure mirrors the leasing activity seen during the same period in 2025, suggesting that despite broader macroeconomic uncertainties, the demand for physical workspace in major urban centers remains resilient.
Structural Shift in Occupier Demand
A critical trend for investors is the change in the composition of this demand. The market is witnessing a clear divergence between traditional IT/ITeS services and Global Capability Centres (GCCs). While third-party IT services leasing has faced a decline of approximately 36% year-on-year, this contraction has been largely offset by the aggressive expansion of GCCs. These centres now account for roughly 41% of total office transactions, up from 37% in the previous year. This shift reflects a move by international corporations toward building high-value capability hubs in India, providing a critical buffer for the real estate sector against reduced spending from traditional tech service providers.
Regional Performance Divergences
Regional activity has been uneven, creating localized trends for developers and investors to watch. Hyderabad has emerged as a significant growth pocket, recording a 50% year-on-year increase in leasing volumes. In contrast, Bengaluru, which has historically been the primary driver of national office demand, recorded a 26% contraction. Analysts often view this Bengaluru dip as a result of a high comparison base from previous years rather than a fundamental lack of interest. Meanwhile, cities like Mumbai and Pune have shown steady growth, serving as important stabilizers for the national leasing average.
Rental Trends and Risks
Despite the stagnation in aggregate leasing volumes, landlords across major urban hubs have generally maintained pricing power. Rental growth has remained a consistent theme, supported by the demand from flex-space operators and domestic enterprises looking for quality office space. However, investors should remain aware of potential risks. The heavy reliance on tech-related sectors—even with the shift toward GCCs—remains a concentration risk. Should global tech spending fluctuate further due to geopolitical issues or macroeconomic headwinds, the absorption rate of premium office space could be impacted. Furthermore, the limited supply of high-quality, green-certified office space in prime locations remains a constraint that may affect future net absorption rates. For investors, the key monitorables moving forward will be the sustainability of GCC-led demand and whether rental yields continue to hold up amidst changing corporate real estate strategies.