India's Grade A office market remained on a firm footing in the first half of 2026, with Global Capability Centres (GCCs) cementing their position as the biggest occupiers of commercial real estate. GCCs leased 19.2 million sq. ft. - 45% of the total 42.6 million sq. ft. of gross office leasing across the country's top seven cities during H1 2026, up from a 41% share, or 15.78 million sq. ft., in the corresponding period last year, according to a research report by Anarock.
Key Highlights
- GCCs leased 19.2 million sq. ft. in H1 2026, capturing 45% of India's total office leasing.
- Office vacancy fell to 15% from 16.3%, while average rentals rose 9% to Rs 96 per sq. ft.
Absorption Rises as New Supply Moderates
The rise in GCC activity came even as developers moderated fresh supply. Net Grade A office absorption increased 2% year-on-year to 27.44 million sq. ft., while new office completions fell 10% to 22.15 million sq. ft. This favourable demand-supply balance helped reduce vacancy levels to 15% from 16.3% a year earlier and pushed average office rentals up 9% to Rs 96 per sq. ft. from Rs 88 per sq. ft., underscoring the resilience of India's commercial real estate market.
"This trend points to a structural shift in India's office market. This is not a short-term demand spike - MNCs are increasingly expanding India-based GCCs to house core functions such as engineering, R&D, AI, finance, cybersecurity, and digital operations. They are drawn by India's deep talent base, operating efficiency, and mature office ecosystem—factors that will continue to drive both GCC and regular CRE absorption in the years to come," said Anuj Puri, Chairman, ANAROCK Group.
Southern Cities Lead GCC Expansion
Southern India remained the epicentre of GCC expansion. Bengaluru led the market with gross office leasing of 10.8 million sq. ft., of which GCCs accounted for 70%, or about 7.55 million sq. ft. Chennai followed, with GCCs contributing 55% of its 3.2 million sq. ft. leasing, while Hyderabad recorded a 48% GCC share of its 6.4 million sq. ft. gross absorption.
Bengaluru and Hyderabad together accounted for nearly half of India's net office leasing in H1 2026, clocking 8.27 million sq. ft. and 5.2 million sq. ft., respectively. Net absorption in Bengaluru grew 26% year-on-year, while Hyderabad posted a 24% increase. In contrast, the National Capital Region (NCR) and Mumbai Metropolitan Region (MMR) witnessed annual declines of 15% and 4%, respectively.
Also Read: GCCs Dominate Office Leasing in FY 2025 - Vestian
Vacancy Tightens Across Major Markets
The tightening demand-supply equation also strengthened market fundamentals. Vacancy declined across all seven major office markets, with Bengaluru's vacancy easing to 10.8% from 12.4%, and Hyderabad's dropping to 23.5% from 26.6%, though it continued to have the highest vacancy among the top seven cities. NCR's vacancy also improved to 20.75% from 22.2%.
"The moderation in new office supply reflects a more calibrated market rather than any underlying weakness. Developers have remained selective in bringing new stock to market, aligning supply more closely with occupier demand and supporting a healthier balance between leasing activity, vacancies, and rentals," Puri said.
Demand Broadens Beyond GCCs
Beyond GCCs, office leasing demand broadened across sectors. IT/ITeS remained the largest occupier segment at 26%, closely followed by flexible workspace operators at 25%, while BFSI, manufacturing, and industrial occupiers continued to expand their office footprint — highlighting the increasingly diversified nature of India's commercial real estate demand.
