Equirus Report Highlights GCC Expansion and Tight Supply Driving India's Commercial Real Estate Growth

India's commercial real estate market is expected to remain on a growth track, supported by the continued expansion of Global Capability Centres (GCCs), limited new office supply, and rising demand for institutional-grade workspaces. According to a report by Equirus, favourable demand-supply conditions are supporting office space absorption and rental growth as companies increasingly migrate to Grade A and green-certified campuses.

During the first half (H1) of 2026, India's top seven cities recorded a net office absorption of 27.4 million square feet, marking a 2 per cent year-on-year increase. This demand outpaced new office completions, which fell 10 per cent year-on-year to 22.2 million square feet. The gap between new supply and net absorption helped bring the average office vacancy rate down to a multi-year low of 15 per cent.

Global Capability Centres remained the primary driver of office demand, accounting for a record 45 per cent of gross office leasing in H1 2026. GCC leasing rose 22 per cent year-on-year to reach 19.2 million square feet. Bengaluru led this demand, accounting for 7.6 million square feet, or 39 per cent of the total GCC leasing nationwide. The report noted that GCC expansion is broadening beyond technology into sectors including engineering, manufacturing, and banking, financial services, and insurance (BFSI).

Overall gross office leasing reached 24.6 million square feet in the second quarter of 2026, while total H1 absorption touched a record 45.5 million square feet across leading cities. The report attributed this growth to multinational capability centres and the rapid expansion of flexible workspace operators. With rising demand, average office rents increased by 9 per cent year-on-year to reach 96 rupees per square foot per month. Southern cities accounted for 58 per cent of the total office take-up, with Bengaluru recording 8.3 million square feet of absorption—up 26 per cent year-on-year—and Hyderabad recording 5.2 million square feet, an increase of 24 per cent.

Sustainability requirements are also playing an increasingly prominent role in the commercial office market. Green-certified buildings accounted for 76 per cent of new office completions and 73 per cent of leasing activity during the period, indicating that environmental, social, and governance (ESG) certifications are becoming a standard requirement for corporate occupiers rather than an optional premium feature.

Beyond commercial office spaces, the retail and logistics sectors showed steady performance. Grade A malls recorded 4.1 million square feet of leasing in H1 2026 against new completions of 0.9 million square feet. Meanwhile, warehousing and industrial leasing grew 16 per cent year-on-year to 22 million square feet, backed by demand from third-party logistics (3PL), e-commerce, and manufacturing firms.

"The steady expansion of Global Capability Centres and the growing preference for green-certified workspaces clearly demonstrate how quality infrastructure continues to attract institutional occupiers across India's major urban centers. With demand consistently outpacing new supply, commercial real estate fundamentals remain resilient, supported by diverse sectors ranging from technology and BFSI to manufacturing and logistics." — Dr. Shishir Gupta, Founder & CEO, StartupLanes