India office market stays robust: Demand projected at 70-75 million sf and new supply likely to touch 60-65 million sf in 2026: Colliers

• Flex operators set to account for 15-18 million sf of annual leasing in 2026, contributing to 20-25% share
• More than 380 million sf of existing Grade A office stock holds the potential to be listed in future REITs
• 80% of leasing is likely to be concentrated in green certified buildings; PropTech and AI inclusion to deepen across asset lifecycle
• By 2030, Grade A office stock is likely to surpass 1 billion sf mark, meanwhile annual demand and new supply to touch 90-100 million sf and 75-85 million sf respectively

Bengaluru, 17^th March 2026: India’s office market is poised to sustain its growth trajectory in 2026, with Grade A demand projected at 70-75 million sq ft and new supply at 60-65 million sq ft, supported by a deeper and more diversified occupier base, evolving occupier preferences and increasing institutionalization of the asset class. Colliers’ latest report “2026 India office: Unlocking agility, vitality and flight-to-quality”, highlights five intrinsic drivers that will shape the next phase of structural growth and occupier resilience – accelerated Global Capability Center (GCC) expansion, rising flex adoption, shift towards REIT-led ownership, tech-enabled workspaces and sustainability focused, climate resilient workplaces.

These shifts driven by agile workspace requirements and flight-to-quality, supported by cost as well as talent arbitrage of major office markets in India, can potentially set a stronger growth trajectory, especially when compared to other markets in the APAC region. By 2030, India’s Grade A office stock is likely to comfortably surpass 1 billion sq ft mark. Moreover, average vacancy levels in the leading cities are likely to decline amidst robust demand, while average rentals will firm up further.

India office market trend and outlook

Source: Colliers

Note: Data pertains to Grade A office buildings only | Gross absorption does not include lease renewals, pre-commitments and deals where only a Letter of Intent has been signed |Top 7 cities includes-Bengaluru, Chennai, Delhi NCR, Hyderabad, Kolkata, Mumbai and Pune | Rentals are Weighted Average Quoted (WAQ) Rents, in INR per square feet per month for warm shell offices and do not include common area maintenance (CAM) or taxes.

Most of the Indian office markets are expected to witness firm demand and project completions in 2026, similar or higher than 2025 levels. This reinforces the prevailing positive occupier sentiment and continued developer confidence in the Indian office market, even in the wake of ongoing global volatilities. Bengaluru is expected to dominate the Indian office market in 2026 too, with the city accounting close to one-third of the overall leasing activity and supply additions each. Meanwhile, Hyderabad and Delhi-NCR are likely to record over 10 million sq ft of demand as well as new supply each in 2026, underscoring their continued prominence in the Indian office market.

City wise demand and new supply trends

Source: Colliers

Note: Data pertains to Grade A office buildings only | Gross absorption does not include lease renewals, pre-commitments and deals where only a Letter of Intent has been signed | Arrows represent indicative Year-on-Year (YoY) change between 2025 and 2026 values

“India’s office market has undergone a steady transition, while picking up pace in recent years. Post the expansionary phase of 2024 & 2025, demarcated by consecutive years of record-breaking demand, the office market is set for a future-ready cycle of structural growth & institutionalization. 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,” says Arpit Mehrotra, Managing Director, Office Services, Colliers India.

GCC leasing volumes are likely to reach 30-35 msf in 2026 and account for 40-50% share

GCCs have evolved from traditional back-offices to innovation-driven, domain specialized, technologically integrated centers and are set to drive 30-35 million sq ft of leasing in 2026, accounting for 40-50% of the Grade A office demand. They are likely to further consolidate their role as high‑value growth engines across diverse sectors like Technology, BFSI, engineering & manufacturing etc.

Trends in India GCC leasing

Source: Colliers

Data pertains to Grade A office buildings only | Data pertains to top 7 cities Bengaluru, Chennai, Delhi-NCR, Mumbai, Kolkata, Hyderabad, Pune | GCC leasing share is share of GCC occupiers in overall leasing during a particular year

Interestingly, going ahead, as GCCs increasingly favor scalable footprints with distributed delivery hubs (HQ + satellite + flex) and flexible commitment periods, real estate developers are likely to progressively focus on modular, scalable and plug‑and‑play facilities.

Flex operators can potentially account for 20-25% of Grade A office space demand in 2026

Flex spaces have become an integral component of occupier strategy driven by scalability, cost arbitrage, risk mitigation, and hybrid work enablement. In 2026, annual leasing by flex space operators is expected to reach 15-18 million sq ft and account for 20-25% of the overall leasing activity.

Trends in leasing by flex operators

Source: Colliers

Data pertains to Grade A office buildings only | Data pertains to top 7 cities Bengaluru, Chennai, Delhi-NCR, Mumbai, Kolkata, Hyderabad, Pune | Percentage values represent share of leasing by flex space operators in overall leasing during a particular year

In fact, the country’s flex stock is expected to touch 85-90 million sq ft by 2026 and surpass 100 million sq ft by 2027. Additionally, flex operators will continue to support GCCs in establishing operations in India through location advisory, regulatory and compliance assistance, talent ecosystem support, and integrating technology infrastructure solutions.

>380 msf of existing Grade A office stock hold the potential to be listed in future REITs

In 2026 and beyond, Real Estate Investment Trusts (REITs) will increase democratization of commercial real estate in India enhancing retail investor participation. Currently, about 525 million sq ft of the existing Grade A office stock in India is REIT-worthy, of which nearly 141 million sq ft of assets are already listed under four office REITs. The remaining 384 million sq ft stock has the potential to be included in future REITs. Resultantly, REIT penetration is likely to breach 20% over the course of next few years, marking a steady shift in how commercial real estate is owned, managed and monetized in India.

Sustainability and technology adoption to grow multifold

Retrofitting, renewable energy integration, and Environmental, Social & Governance (ESG)-aligned designs are becoming central to asset competitiveness led by global mandates, investor scrutiny, and occupier commitment to net-zero goals. As of 2025, with around 574 million sq ft stock, green certified buildings accounted for nearly two-thirds of the overall office stock. Going ahead in 2026, over 80% of the new supply is expected to be green certified, pushing overall green penetration to 70–75% at the India level. In fact, leasing activity in such green certified and tech-integrated buildings is set to rise and account for nearly 80% share in overall leasing in 2026.

“Climate-ready assets are likely to dominate institutional portfolios and REIT pipelines in the long-term, with ESG commitments accelerating the adoption of global best practices.  As ESG performance evolves from a compliance metric to a true value driver, influencing asset valuations and investor preference, data-driven benchmarking will become central to asset competitiveness. In fact, Indian office market has a significant retrofitting potential with over 420 million sq ft of relatively older office buildings (more than 10 years old), which present an investment opportunity exceeding INR 500 billion. Moreover, developers who integrate digital infrastructure and sustainability on an ongoing basis will be best positioned to attract & retain occupiers in the long-term,” says Vimal Nadar, National Director & Head, Research, Colliers India.

Overall, technology adoption is expected to accelerate and expand across all stages of asset lifecycle. Developers and investors will continue to leverage technology platforms for integrated planning, development, operations and tenant experience, as occupiers continue to prioritize technologically advanced, future-ready workplaces.