India office leasing dips 3.9% to 37.9M sf; GCCs strong

India office market records modest 3.9% y-o-y dip, delivering a resilient 37.9 million sq. ft. leasing in H1 2026; GCCs set to surpass 2025’s highs: JLL

•  The tech sector was the biggest contributor in Q2 2026 leasing volumes with a 28.8% share, driven largely by global firms.
•  The Flex sector followed closely behind with a 28.4% share, while Manufacturing/industrial and BFSI sectors followed with 10.8% and 10.2% shares, respectively. 
• Driven by a strong performance by flex operators, domestic occupiers saw their share in the quarterly leasing hit 47.3%, the highest in last 9 quarters. 
• Bengaluru continued to lead the gross leasing activity with a share of 24.6% in the Q2 numbers, followed by Delhi NCR with 21.6%, Pune with 17.7% and Chennai with 13.9%. 
• Bengaluru remained the top office destination for global firms, with the city taking a 31.6% share of all leasing activity by foreign occupiers in Q2. 
• Net absorption for H1 2026 (January-June) hit a decade-high of 26.9 million sq. ft for similar periods, underscoring the rapid pace of headcount expansion by occupiers with India as the focal point of growth, underpinned by its strong fundamentals

MUMBAI, 14 JULY 2026: India’s office market demonstrates maturity as global occupiers take a measured approach amid AI-driven business transformation and evolving geopolitical dynamics. Rather than retreating, companies remain fully invested in India’s growth potential, using Q2 2026 to strategically right-size portfolios and align headcount projections with their long-term vision. Gross leasing volumes of 16.45 million sq. ft in Q2 (April-June) reflect this deliberate, strategic positioning phase. A few slippages in transaction closures as an uncertain business environment resulted in deferred decision-making also contributed to the decline. Despite this, H1 2026 (January-June) remains the second-highest H1 period on record next only to H1 2025 with leasing volumes coming in at 37.9 million sq. ft.

India’s standing as the largest GCC ecosystem globally remains unmatched and GCCs continue to grow at record pace in the country. In H1 2026, GCCs have already leased 15.8 million sq. ft, on track to match and potentially surpass last year’s record levels, given ongoing space discussions and new entrants planning on setting up their centres in the country during the year.

“There's a fundamental transformation we are witnessing in India's office market; and Global Capability Centres (GCCs) seem to be driving this. With 41.7% share of leasing activity and on track to surpass 2025's record with 15.8 million sq. ft already leased in H1 2026, we have seen a strategic shift in the sector. As GCCs continue to leverage our skilled talent in AI, data science, and digital engineering to build products, analytics platforms, and drive innovation, we are witnessing unprecedented expansion from BFSI and manufacturing sectors, alongside new entrants from Retail, Logistics, Infrastructure, and Aerospace domains. Alongside this GCC momentum, flex operators have emerged as a major force, accounting for 28.4% of Q2 leasing and reaching a record 10.23 million sq. ft in H1 2026, reflecting the growing appetite for agile workspace solutions among both domestic and global occupiers,” said Radha Dhir, Chief Executive Officer, India, JLL.

“While 2026 represents a strategic pivot year as firms optimise portfolios, the structural growth trajectory remains intact, we are confident India will hit the century milestone in leasing volumes over News release – continued – the next two years, cementing its position as the epicentre of global business transformation,” she added.

At a city-level, gross leasing volumes in Q2 2026 (April-June) continued to be driven by Bengaluru with a share of 24.6%, followed by Delhi NCR with 21.6%, Pune with 17.7% and Chennai with 13.9% shares, respectively. On a H1 basis, Bengaluru remained the biggest contributor with a 24.7% share, followed by Delhi NCR, Pune, Mumbai and Hyderabad in that order.

Gross Leasing (million sq. ft)

Source: Real Estate Intelligence Service (REIS), JLL Research

On an absolute basis, Flex has now leased 10.23 million sq. ft in H1 2026 across the top seven cities, which is a record high for any H1 periods previously for this segment GCCs displayed an accelerating momentum y-o-y in H1 2026, with activity up by 14.2% and their share in the H1 leasing volumes at 41.7%, underscoring their continued dominant role in driving office space demand in India. Within GCCs, Tech and BFSI dominated the leasing activity followed by manufacturing segment during the first half of the year. Overall, global-headquartered firms continued to command a lion’s share of the India office leasing landscape with a 55.2% share in H1 2026, slightly lower than their previous year average, with the global uncertainties more on display in the second quarter of the year. Domestic occupier activity was driven by indigenous flex operators who held a dominant 57.8% share of the total space leased by domestic firms in H1 2026. Domestic tech firms are re-engineering their service offerings to drive upstream value creation with prolific use of AI to create customised, longterm and strategic outcomes for their clients. They are growing at a slower pace in terms of leasing activity in H1 2026 compared to the same period last year.

Leasing activity by occupier category (million sq ft)

Source: Real Estate Intelligence Service (REIS), JLL Research

India’s net absorption in H1 2026 rose to 26.9 million sq. ft, up by 11.6% y-o-y and the highest ever compared to all previous first half periods. This performance was led by Bengaluru with a 30.9% share with strong space take-up in quality projects across the core markets in the city. Bengaluru was followed by Hyderabad with an 18.8% share with Pune and Delhi NCR with 16.4% and 13.0% shares, respectively. On a quarterly basis, Bengaluru led with a 25.5% share followed closely by Pune with 24.3% and Delhi NCR following with a 15.4% share.

Net Absorption (million sq ft)

Source: Real Estate Intelligence Service (REIS), JLL Research

With new completions at 22.9 million sq. ft in H1 2026, down by 9.3% y-o-y and net absorption hitting a record high during the same period, Pan-India vacancy across the top seven cities fell its lowest in five years at 14.5%, down by 160 bps y-o-y. The core sub-markets across cities continued to witness single digit vacancies, factoring in current occupancies and deals which are nearing closures. In fact, vacancy remains at a historic low for Mumbai over the last 16 years and in Delhi NCR over the past fifteen. The current vacancy in Pune is also lowest in last 6 quarters and in case of Hyderabad with robust space take-up has now fallen to a two-year low. For Bengaluru and Chennai vacancy levels are down y-o-y, while vacancy levels have dropped the most y-o-y in Hyderabad followed by Delhi NCR and Pune, indicating an impending shortage of vacancy in high-quality buildings across key office corridors in all cities.

While near-term leasing volumes reflect measured caution driven by geopolitical uncertainty and AIled business transformation, India’s structural advantages, exceptional talent pool, a thriving innovation ecosystem, and compelling cost arbitrage, position the country for sustained office market growth. The fundamental drivers remain robust: GCCs are creating product ownership roles that fuel continued headcount expansion and real estate footprint growth, while tightening vacancy rates within core assets and submarkets signal strong appetite for business expansion. Occupancy levels are ramping up across existing portfolios, creating capacity constraints that will drive new demand. Despite potential near-term disruptions including cautious decision-making and portfolio right-sizing, a healthy pipeline of institutional-backed quality supply stands ready to support growth. Most importantly, India's position as the strategic hub for global business innovation and transformation remains firmly intact. These structural levers, combined with the momentum established in previous years, are expected to keep 2026 leasing levels within range of 2025’s historic performance and create a multi-year growth runway for India's office sector.

*Gross leasing refers to all lease transactions recorded during the period, including confirmed precommitments, but does not include term renewals. Deals in the discussion stage are not included

*Net absorption is calculated as the new floor space occupied less floor space vacated. Floor space that is pre-committed is not considered to be absorbed until it is physically occupied

JLL is India’s premier and largest professional services firm specializing in real estate. The Firm has grown from strength to strength in India for the past two decades. JLL India has an extensive presence across ten major cities (Mumbai, Delhi NCR, Bengaluru, Pune, Chennai, Hyderabad, Kolkata, Ahmedabad, Kochi, and Coimbatore) and over 130 tier-II and III markets with a cumulative strength of over 16,900 employees. The Firm provides investors, developers, local corporates, and multinational companies with a comprehensive range of services. These include leasing, capital markets, project development, facility management, property management, transaction management, and research advisory. These services cover various asset classes such as commercial, industrial, warehouse and logistics, data centres, residential, retail, hospitality, healthcare, senior living, and education. For further information, please visit https://www.jll.com/en-in/