India office market remains resilient as demand stays ahead of new supply

India's commercial real estate market is projected to remain robust, driven by the expansion of Global Capability Centres (GCCs), limited new office supply, and rising demand for premium workspaces, according to a report by Equirus. Net office absorption in the first half of 2026 grew by 2% year-on-year to 27.4 million sq ft in India's top seven cities, while new office completions fell by 10% to 22.2 million sq ft.

This gap between demand and new supply pushed the average office vacancy rate to a multi-year low of 15%. Global Capability Centres accounted for 45% of gross office leasing in H1 2026, with Bengaluru leading the market at 7.6 million sq ft, or 39% of total GCC leasing. The report highlighted a surge in GCC expansion beyond the technology sector into engineering, manufacturing, and banking, financial services, and insurance.

Overall office leasing remained strong, with gross office leasing reaching 24.6 million sq ft in Q2 2026 and H1 absorption hitting a record 45.5 million sq ft across leading cities. Southern cities contributed to 58% of total office take-up, with Bengaluru seeing a 26% year-on-year increase in office absorption, up to 8.3 million sq ft.

Sustainability is gaining traction, as green-certified buildings made up 76% of new office completions and 73% of leasing activity in H1 2026, signaling ESG certification as a crucial requirement for businesses. Despite a 9% rise in average office rents to Rs 96 per sq ft per month, retail and warehousing sectors showed resilience, with Grade A malls leasing 4.1 million sq ft and warehousing and industrial leasing growing by 16% year-on-year to 22 million sq ft.