India’s office leasing market is diversifying in 2026, with Pune emerging as a key hub and global capability centres driving record demand across smaller cities, signalling a shift towards a more balanced and talent-driven growth phase.
India’s office market is moving into a broader phase of growth in 2026, with demand no longer concentrated only in Bengaluru and a handful of large metros. Pune has emerged as one of the clearest beneficiaries of that shift, while smaller cities are beginning to attract attention from global occupiers looking for talent, lower operating costs and more flexible expansion models.
Savills India said office leasing across the country’s six biggest cities reached 41.6 million sq ft in the first half of 2026, up 7% from a year earlier, even as new supply fell 5% to 23.7 million sq ft. That mismatch helped vacancy ease to 13.2%, suggesting a market that is growing more carefully balanced than in previous cycles. Other brokers reported similarly strong numbers: Cushman & Wakefield put first-half gross leasing at about 43 million sq ft, while Livemint reported 45.5 million sq ft, the highest half-year total on record.
Pune stood out with leasing growth of 56%, underscoring how quickly demand is spreading beyond the traditional office hubs. Amal Mishra, co-founder and chief executive of Urban Vault, told Zee Business that Pune’s recent rise is not a passing trend but part of a longer-term shift, helped by a strong base in banking, financial services and insurance as well as a widening mix of occupiers. He said the city has also been drawing research and development space and AI-focused GCCs, reflecting a more diverse tenant profile.
Global Capability Centres remain the main force behind that expansion. Arvind Nandan, managing director at Savills India, told Zee Business that GCCs now account for nearly half of demand across the six major markets, up from about 30% four or five years ago. Cushman & Wakefield said GCCs represented 38% of leasing in the first half of 2026, while Business Standard reported they made up 42% of Q2 activity. Livemint put their share at 43% in the first half, with leasing by these centres at a record 19.6 million sq ft.
The appeal is no longer just about lower costs. Nandan said India’s advantage lies increasingly in its talent base, including technology specialists and engineering graduates, while Mishra said companies are now pursuing a “plus-one” strategy: keeping core operations in established cities while adding a second location in an emerging market. He added that smaller “nano GCCs” are starting to look at places such as Indore, Dehradun and Jaipur, even if that transition will take time.
Flexible workspaces are also becoming central to the market’s evolution. Cushman & Wakefield said operators leased 8.4 million sq ft in the first half, up 55% from a year earlier, while Business Standard said flexible workspace demand helped drive a record quarterly total in Q2. The growing use of these spaces reflects the need for speed, lower execution risk and more adaptable lease structures. Colliers and The Economic Times both expect the next stage of growth in India’s office market to be shaped by GCC expansion, flexible workspaces and greater institutional participation through real estate investment trusts, with Bengaluru still leading but Hyderabad and Delhi-NCR also posting strong activity.
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