Mumbai, July 17: India’s Grade A office market remained steady in H1 2026, with GCC expansion emerging as the defining force behind leasing activity across the 7 cities. Even as global businesses stayed selective on expansion, India continued to attract occupiers looking to consolidate higher-value functions in established office markets.
Latest ANAROCK Research indicates that out of the total gross leasing of approximately 42.6 Mn sq. ft. in H1 2026 across the top 7 cities, GCCs alone leased about 19.2 Mn sq. ft. – 45 percentage of the total. In H1 2025, their share stood at 41 percentage, with about 15.78 Mn sq. ft. leased out of the total 38.24 Mn sq. ft.
South Leads GCC Surge
The southern markets continue to lead the GCC dominance trend:
- In Bengaluru, of the approximately 10.8 Mn sq. ft. gross office absorption in H1 2026, GCCs alone accounted for 70%, or around 7.55 Mn sq. ft..
- In Chennai, their share stood at 55% of the total 3.2 Mn sq. ft., or approximately 1.75 Mn sq. ft.
- In Hyderabad, GCCs accounted for 48% of the city’s 6.4 Mn sq. ft. gross office absorption, or around 3.05 Mn sq. ft.
Anuj Puri, Chairman – ANAROCK Group, says,
“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.”
H1 2026: Office Market Dynamics
According to the ANAROCK Research data, Grade A net office absorption reached 27.44 Mn sq. ft. in H1 2026, marking a 2 percentage increase over the 26.8 Mn sq. ft. recorded in H1 2025. GCCs continued to anchor overall demand, reinforcing their growing influence on India’s office market trajectory.
|
NET Office Absorption (In Million Sq. ft.) |
|||
|
City |
H12026 |
H12025 |
% Change (H1 2026 Vs H1 2025) |
|
Bangalore |
8.27 |
6.55 |
26% |
|
MMR |
4.3 |
4.5 |
-4% |
|
NCR |
4.27 |
5 |
-15% |
|
Chennai |
2.35 |
2.3 |
2% |
|
Hyderabad |
5.2 |
4.2 |
24% |
|
Pune |
2.55 |
3.8 |
-33% |
|
Kolkata |
0.5 |
0.45 |
11% |
|
Total |
27.44 |
26.8 |
2% |
Bengaluru and Hyderabad together accounted for about 13.47 Mn sq. ft., or 49% of total net leasing in H1 2026. Bengaluru recorded a 26% annual increase in net leasing at approximately 8.27 Mn sq. ft., while Hyderabad saw a 24% increase at nearly 5.2 Mn sq. ft..
MMR and NCR recorded almost similar net leasing volumes in H1 2026, at approximately 4.3 Mn sq. ft. and 4.27 Mn sq. ft., respectively. However, MMR saw a 4% annual decline in net leasing, while NCR registered a 15% drop.
The strength in leasing translated into healthier market fundamentals. While net absorption rose 2% year-on-year, new office completions declined 10%, reflecting a measured supply pipeline amid evolving market conditions. New office completions fell from 24.51 Mn sq. ft. in H1 2025 to 22.15 Mn sq. ft. in H1 2026.
Given that demand continued to outpace fresh supply, vacancy levels across the top 7 cities softened to 15% in H1 2026 from 16.3% in H1 2025, pointing to a tightening market
|
New Office Completion (In Million Sq. ft.) |
|||
|
City |
H12026 |
H12025 |
% Change (H1 2026 Vs H1 2025) |
|
Bangalore |
7.05 |
6.91 |
2% |
|
MMR |
3.3 |
1.9 |
74% |
|
NCR |
3.95 |
3.7 |
7% |
|
Chennai |
2.55 |
1.5 |
70% |
|
Hyderabad |
3 |
4.7 |
-36% |
|
Pune |
2.1 |
5.7 |
-63% |
|
Kolkata |
0.2 |
0.1 |
100% |
|
Total |
22.15 |
24.51 |
-10% |
Bengaluru and Hyderabad recorded the most visible reduction in vacancy levels. Vacancy in Bengaluru declined from 12.4% in H1 2025 to 10.8% in H1 2026, while Hyderabad saw vacancy fall from 26.6% to 23.5% during the same period. Even so, Hyderabad continues to have the highest vacancy level among the top 7 cities.
|
Office Vacancy in Top 7 Cities (%) |
||
|
City |
H1 2026 |
H1 2025 |
|
Bangalore |
10.80% |
12.40% |
|
MMR |
13.50% |
15.10% |
|
NCR |
20.75% |
22.20% |
|
Chennai |
8.60% |
9.10% |
|
Hyderabad |
23.50% |
26.60% |
|
Pune |
11.40% |
11.75% |
|
Kolkata |
16.90% |
17.90% |
|
Total |
15.00% |
16.30% |
Rentals Rise
Average monthly office rentals across the top 7 cities also moved up, supported by sustained demand for premium Grade A assets. According to ANAROCK Research, the top 7 cities collectively recorded 9% annual growth in average monthly office rentals, from Rs 88 per sq. ft. in H1 2025 to Rs 96 per sq. ft. in H1 2026. Bengaluru, NCR, and Hyderabad recorded double-digit annual rental growth of 10% each.
“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,” says Puri.
Beyond traditional IT/ITeS demand, sectors such as BFSI, manufacturing and industrial occupiers, as well as co-working operators, continued to expand their office footprint in H1 2026. Notably, the share of flexible workspace operators was just 1 percentage point behind the IT/ITeS sector, at 25% versus 26%, highlighting the increasingly diversified nature of office demand even as GCCs remain the central growth driver.