A new CBRE survey indicates that 40% of office occupiers are concerned about securing premium office space through 2028. With India reporting record-high leasing in early 2026, the focus is shifting toward top-tier, well-connected properties. This trend benefits major developers and REITs, while creating potential vacancy risks for older, non-compliant assets.
India’s office market is witnessing a distinct trend of companies prioritising premium workspaces, which is creating a potential supply imbalance. According to a recent survey by CBRE, 40% of office occupiers are now concerned about the future availability of high-quality, well-located office space through 2028. This anxiety is occurring against the backdrop of record-high market activity, with India recording approximately 45.5 million square feet of office leasing in the first half of 2026.
Factors Driving the Quality Shift
The demand for premium space is largely led by Global Capability Centers (GCCs), which accounted for 43% of total leasing activity in the first half of 2026. These occupiers are increasingly selective, prioritising buildings that offer advanced technological infrastructure, sustainability features, and easy accessibility for employees. Consequently, core, established business districts are seeing significantly faster uptake compared to peripheral areas. Nearly half of the occupiers surveyed indicated a preference for these core locations to ensure they attract and retain talent.
Impact on Developers and REITs
For the Indian commercial real estate market, this trend is creating a two-speed environment. Major developers and commercial Real Estate Investment Trusts (REITs) that hold portfolios of modern, investment-grade assets are well-positioned to benefit from this concentrated demand. These companies can often command higher rentals and maintain lower vacancy rates due to the flight-to-quality trend.
Conversely, the outlook for older or 'Grade B' office assets is more challenging. As tenants increasingly move toward modern, energy-efficient, and tech-enabled buildings, older properties that cannot be easily upgraded face a growing risk of higher vacancy levels. Investors should note that the value of these assets may diverge significantly from prime, institutional-grade properties.
Sector Risks to Monitor
While the current leasing momentum is robust, the office sector faces notable risks. A primary concern is the heavy reliance on the IT and ITeS sector, which remains a major demand driver. If global economic conditions cause these companies to slow down hiring or shift their real estate strategies, leasing demand could moderate. There is also the challenge of operational readiness; developers must ensure that new supply is not only completed on time but also meets the strict global standards required by multinational tenants. Moving forward, the key factor for investors to track will be the divergence in vacancy rates between prime, centrally located assets and older office properties in less connected areas.