AI is transforming India’s office space demand by attracting mid-sized and smaller global firms across diverse sectors, leading to a robust leasing spree and new development pipelines, according to Embassy Office Parks REIT’s CEO.
Artificial intelligence is beginning to change who comes to India looking for office space, with mid-sized global firms and smaller Global Capability Centres increasingly joining the country’s tenant base, Embassy Office Parks REIT chief executive Amit Shetty said.
In comments reported by The Hindu BusinessLine, Shetty said the shift is widening demand beyond the traditional pool of large Fortune 500 occupiers. Embassy REIT said 86% of its leasing in the latest quarter came from new entrants, while AI-linked organisations accounted for 21% of deals, suggesting that AI is acting as a catalyst for office demand rather than merely a theme in the technology sector.
The company’s latest figures underscore that momentum. Embassy REIT reported a 17% year-on-year rise in revenue to ₹1,241 crore and a similar increase in net operating income to ₹1,020 crore in the first quarter of FY27. Business Wire said the REIT also finished FY2026 with 6.4 million square feet of leasing across 86 deals, revenue of ₹4,582 crore and net operating income of ₹3,760 crore, while guiding for another year of double-digit growth in FY2027.
Shetty said the range of companies coming into India has broadened to include firms from semiconductors, robotics, telecoms, healthcare and pharmaceuticals, not just traditional IT players. He argued that India’s deep pool of technology workers is lowering the bar for smaller overseas businesses to set up operations, with about 250,000 people now working in AI and machine learning and many more existing IT staff retraining for newer tools.
That demand is feeding into a stronger office market more broadly. Embassy REIT said gross leasing reached 45.5 million square feet in the first half of calendar 2026 as vacancy eased and rents moved up. The trust is responding with a 6.2 million square foot development pipeline worth about ₹3,500 crore, with roughly 60% of space due for delivery over the next two years already pre-leased. It is also pushing ahead with new projects in Chennai and Bengaluru, betting that the AI-led demand shift has further to run.
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