Office Space, Retail & Beyond: Growth Curve of Indian Commercial Real Estate in FY26

By Ashwani Kumar

While global markets are reeling under the unpredictable US policies, it has, in the immediate terms, immensely benefited India’s commercial real estate.

As a result, while the entire Asia-Pacific (APAC) region, as reported by the global real estate consultancy Cushman & Wakefield, witnessed a surge in investment in the realty sector, India, riding on the tailwinds of pro-active economic policies, not only clocked high growth but also turned into one of leading performers.

However, we should be mindful that this high number is not just a short-term gain shaped by the US’s dilly-dallying. Supercharged by massive infrastructure development, industrialisation, improvement in connectivity and its emergence as a global economic power, including legal provisions such as RERA that ensure buyers’ protection, the realty sector’s growth is on a high trajectory.

Both residential and commercial segments are among the big beneficiaries. But considering the return potential, rental value and yield on investment, the latter (retail as well as office) turns into a prime pick.

Office Spaces: Gurugram’s Flexes Its Muscles

At the same time, it is interesting to note that while India’s stature rose in APAC, within the country, NCR’s leasing of 2.8 msf in Q1 2025 turned into a top performer in the country.

Even in NCR, Gurugram, with 62 per cent of the share in the pie, raced ahead of the other NCR cities. The reason for NCR’s rise is easy to explain.

While the Noida International Airport (racing towards operationalisation) has been instrumental in raising its stature as a global hub, the news of international firms such as Microsoft, Infosys, Adani, etc., setting up their offices has turned the spotlight on the region.

Due to this, while the other NCR regions are fast catching up hubs like Bangalore and Hyderabad, Gurugram, due to its first-mover advantage and proximity to the Indira Gandhi International Airport, continues to maintain its pole position.

Clocking High Growth

The residential revolution and economic growth have also led to the retail segment’s high performance. Not only are Grade A+ malls now consistently displaying low vacancy rates (as low as 3-4 per cent), but rents have increased 29 per cent since 2019.

This trend is consistent all across the country and NCR is no exception. This is also because modern malls, instead of merely being shopping destinations, have turned into lifestyle ecosystems.

Warehousing & Data Centres

Warehousing & data centres have also consolidated their position as a strategic backbone of growth. While Pune and Chennai have traditionally dominated in the country, NCR, with two international airports and one domestic terminal at Hindon, is also fast catching up. Data centres are another fast-growing frontier in NCR.

FY26 Outlook: Diversification Drives Dominance

Projected to reach $106 billion by 2029, India’s commercial real estate now thrives on diversified demand. Co-working spaces cater to hybrid work models, Grade A+ retail absorbs luxury brands and AI-driven warehouses optimise supply chains. Gurugram’s skyline—a mosaic of LEED-certified offices and tech parks—symbolises this shift from growth to maturity.

India’s commercial real estate sector is transitioning from recovery to reinvention with Gurugram spearheading this evolution. As global capital pivots to high-yield, recession-resilient assets, the message is unambiguous: India isn’t merely participating in the APAC growth story—it’s leading it.

The author is Head of Sales and Marketing at Pyramid Infratech