Grade A office demand in India to hit 75 mn sq ft in 2026: Report

India's Grade A office market is projected to see demand of 70-75 million sq ft in 2026, driven by GCC expansion and flex spaces, a Colliers report finds. Bengaluru is expected to lead leasing activity, with GCCs accounting for 40-50% of demand.

India's office real estate market is expected to sustain strong momentum in 2026, with Grade A office demand projected at 70-75 million square feet and new supply estimated at 60-65 million square feet, according to a report by Colliers.

Future-Ready Growth and Institutionalisation

The report, titled "2026 India office: Unlocking agility, vitality and flight-to-quality," attributes this growth to a diversified occupier base, evolving workplace strategies, and increasing institutionalisation of commercial real estate. Key drivers include the expansion of Global Capability Centres (GCCs), rising adoption of flexible workspaces, technology-led transformation, sustainability initiatives, and a gradual shift toward REIT-led ownership.

India's office market has undergone a steady transition, while picking up pace in recent years. Post the expansionary phase of 2024 and 2025, demarcated by consecutive years of record-breaking demand, the office market is set for a future-ready cycle of structural growth and institutionalisation. The ongoing scale-up is likely to be driven by expanding footprint of GCCs, strengthening flex space offerings, expanding talent corridors and broadening occupier base. These enabling factors are likely to fuel Grade A leasing activity to the tune of 70-75 million sq ft in 2026, building a potential roadmap towards 100 million sq ft of annual demand in the coming years," said Arpit Mehrotra, Managing Director, Office Services, Colliers India.

Bengaluru to Lead Major City Markets

Among key cities, Bengaluru is expected to dominate, accounting for nearly one-third of overall leasing activity and supply additions. Hyderabad and Delhi-NCR are each likely to record more than 10 million sq ft of both demand and new supply, reflecting continued occupier interest across major markets.

Deep Dive into Demand Drivers

Global Capability Centres (GCCs)

GCCs are projected to remain a primary demand driver, with leasing volumes estimated at 30-35 million sq ft in 2026, contributing 40-50 per cent of overall Grade A office demand. These centres continue to evolve into innovation-led hubs across sectors such as technology, BFSI, and engineering and manufacturing.

Flexible Workspaces

Flexible workspace operators are also set to expand their footprint, with annual leasing likely to reach 15-18 million sq ft, accounting for 20-25% of total demand, driven by scalability, cost efficiencies, and hybrid work models.

Emerging Trends: REITs, Sustainability, and Long-Term Outlook

The report highlighted growing investor interest via Real Estate Investment Trusts (REITs), noting that about 384 million sq ft of existing Grade A office stock has the potential to be listed in the future, which could deepen retail participation in commercial real estate.

Sustainability and technology adoption are expected to play a central role going forward, with about 80% of leasing activity in 2026 likely to be concentrated in green-certified buildings.

By 2030, India's Grade A office stock is projected to surpass 1 billion sq ft, with annual demand reaching 90-100 million sq ft and supply touching 75-85 million sq ft. (ANI)

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