India’s Office Leasing Reaches Record 43 Million Square Feet in First Half of 2026 as Global Capability Centres Drive Demand: Cushman & Wakefield
Gurugram, July 5, 2026: India’s office sector sustained its growth momentum in the first half of 2026, with gross leasing volume (GLV) reaching approximately 43 million square feet (MSF). According to Cushman & Wakefield’s Q2 2026 Office Market Beat Report, this marks the highest first-half leasing volume on record, growing five percent year-on-year over the first half of 2025. The performance reflects resilient occupier demand underpinned by sustained expansion from Global Capability Centres (GCCs) and an increasingly diversified occupier base, despite prevailing global macroeconomic uncertainties. The overall GLV, which factors in all leasing activity including fresh take-up, open market renewals, and pre-leasing, stood at approximately 21 MSF during the second quarter of 2026, witnessing a marginal one percent moderation on both a quarter-on-quarter and year-on-year basis, Cushman & Wakefield said in a press release.
The growth was largely anchored by GCCs, which remained the principal growth engine of India’s office market by leasing approximately 16.5 MSF during the first half of 2026. This accounted for 38 percent of total leasing activity and marked a robust 38 percent year-on-year increase. The momentum remained strong in the second quarter as GCC occupiers transacted nearly 8 MSF, contributing 37 percent of overall office leasing. The geographic footprint of GCC demand also continued to broaden during the first half of the year, with Bengaluru, Pune, Delhi NCR, and Mumbai together accounting for nearly 80 percent of total GCC leasing. While Bengaluru remained the country’s largest GCC market with 5.36 MSF of leasing, Pune recorded 3.01 MSF, Delhi NCR saw 2.37 MSF, and Mumbai witnessed 2.23 MSF of demand. Hyderabad and Chennai also attracted healthy GCC activity with 1.63 MSF and 1.50 MSF respectively, highlighting how occupiers are increasingly expanding across multiple markets to access talent, build operational resilience, and support long-term growth.
On a city-by-city basis for total GLV during the first half of 2026, Mumbai recorded 10.7 MSF, marking a 30 percent year-on-year increase from 8.2 MSF in the first half of 2025. Bengaluru saw a seven percent increase to 10.3 MSF, Hyderabad jumped 25 percent to 5.2 MSF, and Ahmedabad witnessed a 244 percent surge to 0.8 MSF. Conversely, Delhi NCR declined 16 percent to 6.9 MSF, Chennai dropped 29 percent to 2.9 MSF, Pune dipped three percent to 5.3 MSF, and Kolkata fell three percent to 0.8 MSF. Meanwhile, occupier demand continued to diversify sectorally during the first half of the year. While IT-BPM remained the largest contributor to leasing activity with a 22 percent share, BFSI and Engineering & Manufacturing strengthened their presence, accounting for 19 percent and 16 percent of demand, respectively. Additionally, flexible workspace operators continued to strengthen their portfolio by leasing 8.4 MSF, accounting for one-fifth of total leasing activity. This marks a 55 percent year-on-year increase and the highest-ever half-yearly volume recorded by the segment, reflecting an evolving preference for agile workplace strategies and managed office solutions.
Net absorption across the top eight cities, which measures the net change in occupied space, remained healthy at approximately 23 MSF in the first half of 2026, despite a 19.8 percent moderation year-on-year. For the second quarter, net absorption stood at 11.6 MSF, which was broadly in line with the previous quarter but represented a 14.5 percent decline year-on-year. This moderation was largely influenced by lower supply additions and the constrained availability of new space during the period. Despite this, underlying occupier demand remained resilient, driving vacancy compression across key office markets. Bengaluru was the largest contributor, accounting for nearly 30 percent of pan-India net absorption, followed by Pune and Hyderabad, which contributed 15 percent each.
Supply additions across the top eight cities stood at approximately 21 MSF in the first half of 2026, reflecting a 10 percent year-on-year decline. However, supply momentum in the second quarter saw a 40 percent quarter-on-quarter increase, with new completions reaching around 12 MSF. As projects awaiting final approvals move toward completion, a healthy pipeline of more than 35 MSF is expected to enter the market during the second half of the year. Driven by sustained leasing and lower-than-anticipated supply additions, pan-India vacancy declined further to 13.7 percent in the second quarter of 2026, marking the twelfth consecutive quarter of vacancy compression and the lowest vacancy levels recorded post-pandemic. This tightening of space also led to rental growth across all major office markets in the second quarter, with Chennai, Mumbai, Hyderabad, and Ahmedabad leading the appreciation at two to three percent quarter-on-quarter.
Commenting on the market dynamics, Anshul Jain, Chief Executive – India, SEA, MEA & APAC Office and Retail, Cushman & Wakefield, said, “The robust leasing activity during the first half of 2026 reinforces the structural strength of India’s office market. While global macroeconomic and geopolitical uncertainties have led occupiers to adopt a more measured approach to decision-making, the underlying demand story remains firmly intact. Organisations continue to make long-term commitments to India, reflecting confidence in the country’s talent ecosystem, business environment and long-term growth potential.
“Jain further noted the shifting dynamics on the supply side, stating, “Global Capability Centres continue to be at the heart of this momentum, with their expansion increasingly shaping demand across multiple office markets. At the same time, we are also beginning to see market conditions evolve from the supply side. Over the past couple of years, many developers prioritised residential development amid strong housing demand. However, with office vacancy tightening to post-pandemic lows, rental growth strengthening and demand remaining resilient, we expect commercial development activity to regain greater attention. A healthier supply pipeline will be critical in supporting the next phase of growth in India’s office sector.
“Veera Babu, Executive Managing Director, Tenant Representation – India, Cushman & Wakefield, highlighted the current supply constraints and forward planning by occupiers, adding, “The first half of 2026 highlights a market where demand continues to outpace the availability of quality office space across several key locations. There is an active demand of ~80 MSF in the market and with vacancy levels falling to their lowest point since the pandemic, occupiers are increasingly evaluating space requirements well in advance, particularly in markets where availability of quality assets is becoming more constrained. As new supply enters the market over the second half of the year, occupiers will have greater access to quality office stock, which is expected to support stronger absorption across key markets. This combination of sustained demand and improving supply visibility is expected to drive continued momentum in India’s office sector through the remainder of the year.”
