India’s Grade A office market saw 42.6 million square feet leased in the first half of 2026, driven largely by Global Capability Centres. These centres accounted for nearly half of all leasing activity, helping to push average rentals up by 9% to ₹96 per square foot. This trend reflects a tightening supply-demand balance in major commercial hubs.
Global Capability Centres (GCCs) have become the primary force behind India's commercial real estate market in the first half of 2026. During this period, these centres leased 19.2 million square feet of space, representing 45% of the total 42.6 million square feet leased across the nation's top seven cities. This growth highlights a steady shift in how office spaces are occupied, with multinational corporations increasingly setting up units in India to manage functions like research and development, artificial intelligence, and cybersecurity.
Impact on Supply and Rental Growth
The strong demand from GCCs has significantly altered the market dynamic. While demand remained high, developers have taken a more cautious approach to new projects, resulting in a 10% decline in new office completions, which totaled 22.15 million square feet. This combination of rising demand and moderated new supply has tightened the market. As a result, vacancy rates across the top seven cities dropped to 15%, down from 16.3% a year earlier. This improved balance has allowed landlords to increase average rentals by 9%, bringing them to ₹96 per square foot.
Regional Leasing Trends
Southern cities have emerged as the primary beneficiaries of this growth. Bengaluru remains the leader, with 10.8 million square feet of gross office leasing, where GCCs represented 70% of the total volume. Hyderabad and Chennai also recorded strong numbers, with GCCs contributing 48% and 55% to their respective leasing totals. Together, Bengaluru and Hyderabad accounted for nearly 50% of the net office leasing in India during the first half of the year. In contrast, markets like the National Capital Region and the Mumbai Metropolitan Region saw a decline in net absorption compared to the previous year.
Diversified Occupier Demand
While GCCs are the largest driver, demand is becoming more balanced across other segments. IT/ITeS companies captured 26% of the leasing market, followed closely by flexible workspace operators at 25%. Traditional sectors, including banking, financial services, manufacturing, and industrial firms, also expanded their office footprints. This diversification reduces reliance on any single sector and suggests a broader base for commercial real estate demand.
For investors monitoring the commercial real estate space, the key to future performance will be the ongoing balance between new project completions and actual leasing activity. While the current trend of rising rentals and lower vacancy is positive for commercial property owners and real estate investment trusts (REITs), the long-term benefit will depend on whether this leasing momentum continues as developers begin to bring more supply to the market in the coming quarters.