India’s office property market is seeing a change in demand patterns, with global capability centres (GCCs), flexible workspace operators and domestic businesses driving a larger share of leasing. This comes as demand from traditional third-party IT services companies slows.
Office leasing across 8 major Indian cities reached 66.7 million sq ft in the first 9 months of 2026, remaining broadly unchanged from the same period in 2025, according to Knight Frank India.
“India’s office market continues to grow, even as global businesses operate against a more uncertain geopolitical backdrop. While the headline leasing numbers remain stable, the more important shift is in the nature of demand. GCCs are rapidly expanding their footprint, while flex operators and India-facing businesses are also contributing meaningfully to activity,” said Shishir Baijal, International Partner, Chairman and Managing Director of Knight Frank India.
He said the trend reflects India’s growing role in global capability development and domestic business expansion. With rents increasing across all markets, he added that market fundamentals remain healthy ahead of the final quarter.
GCCs accounted for 41% of office transactions between January and September, up from 37% in 2025 and 31% in 2024. Their leasing rose 10.4% year-on-year to 27.4 million sq ft, making them the largest source of demand.
In contrast, leasing by third-party IT and IT-enabled services (ITeS) companies fell 36% to 9 million sq ft from 14.1 million sq ft a year earlier. Lower activity in Bengaluru, Chennai and the National Capital Region drove the decline, while Hyderabad led this segment with 2.9 million sq ft.
Bengaluru remained the largest GCC market, accounting for 9.8 million sq ft, or 36% of GCC leasing across the 8 cities. Hyderabad recorded nearly 70% annual growth, reaching 6.2 million sq ft. In the September quarter, GCC leasing rose 19% year-on-year to 6.8 million sq ft, with Hyderabad contributing 42%.
Flexible workspace operators leased 16.1 million sq ft, up 14%, accounting for 24% of transactions. India-facing businesses leased 14.3 million sq ft, up 3.5%, representing 21% of demand. Mumbai led this segment with 4.6 million sq ft, followed by the National Capital Region at 3.3 million sq ft.
New office completions increased 50% year-on-year to 48.6 million sq ft. Despite rising supply, rents grew across all 8 markets. The national vacancy rate edged up to 14.7% in the September quarter from 14.5% a year earlier.
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