Why Investors Remain Bullish on India’s Office Real Estate Sector?
By Ashwani Kumar, Pyramid Infratech
India’s office real estate sector continues to reinforce its position as one of the country’s most resilient investment destinations. Investor confidence remains strong despite global economic uncertainty. This confidence is driven by robust occupier demand, expanding Global Capability Centre (GCC) activity, improving market fundamentals, and sustained capital inflows. Together, these factors are strengthening long-term growth prospects and positioning office assets as a preferred investment class.
The sector’s strength is evident in its leasing performance. According to JLL, India’s office market recorded 21.5 million sq. ft. of gross leasing in the first quarter of 2026, marking the strongest first quarter on record. Net absorption stood at 13.7 million sq. ft., indicating that demand is translating into actual space utilisation. This level of activity provides investors with greater visibility of future rental income and reinforces confidence in long-term asset performance.
A significant portion of this demand is driven by GCCs. Global firms are increasingly setting up technology, engineering, and innovation centres in India to leverage its skilled workforce and cost advantages. As a result, GCCs accounted for nearly 45.5 percent of leasing activity during the first quarter of 2026. These occupiers typically commit to larger spaces and longer lease tenures. This supports stronger occupancy levels and stable income streams, while also encouraging greater investment activity.
This strong occupier demand is translating into rising investment momentum. According to JLL, India’s real estate sector attracted USD 1.3 billion in investments during the first quarter of 2026, with office assets accounting for 62 percent of total inflows. Private equity activity further highlights this trend. According to Savills India, private equity investments rose 66 per cent year-on-year to USD 1.2 billion during the quarter. Office assets attracted the largest share at 41 per cent. These figures underline the growing preference for office real estate among institutional and private investors.
The investment case is further supported by improving market fundamentals. Occupiers are increasingly prioritising Grade-A workplaces with modern infrastructure and sustainability features. This shift is driving demand for premium office developments. At the same time, vacancy levels across major markets have declined. According to Cushman & Wakefield, vacancy rates fell below 14 per cent in the first quarter of 2026. Additionally, average office rentals increased by around 6 per cent year-on-year, supporting stronger asset valuations.
Within this broader growth story, Delhi-NCR continues to emerge as a key office market. The region recorded 12.7 million sq. ft. of leasing in 2025, reflecting sustained occupier confidence. Building on this momentum, Delhi-NCR and Bengaluru together accounted for nearly 46 percent of institutional real estate investments during the first quarter of 2026.
This highlights their importance in investor strategies. At the same time, average office rentals in Delhi-NCR crossed ₹100 per sq. ft. per month for the first time, reflecting strong demand in premium locations. Much of this regional growth is led by Gurugram, which remains a major corporate and investment hub. The city continues to attract multinational firms, GCCs, and technology companies. This is driving sustained demand for premium office space. Industry estimates suggest that Gurugram contributed nearly 3–4 million sq. ft. of leasing during the first quarter of 2026.
Investor interest in Gurugram remains equally strong. According to Savills, office investments during the quarter were concentrated in Gurugram and Pune. This highlights the city’s importance in institutional strategies. Overall, India’s office real estate sector remains a compelling investment opportunity. Strong leasing activity, rising GCC demand, improving fundamentals, and sustained capital inflows are reinforcing investor confidence. At the same time, the performance of key markets such as Delhi-NCR and Gurugram continues to support long-term growth.
Disclaimer: Views expressed in this article are those of the author, and not necessarily of Realty&More.
