Global Capability Centres (GCCs) strengthened their position as the biggest demand driver in India’s office real estate market in the first half of 2026, accounting for 45% of total Grade A office leasing across the country’s seven major cities, according to Anarock Research.
The report said GCCs leased 19.2 million sq. ft. of office space out of the total 42.6 million sq. ft. gross leasing recorded during H1 2026, up from 15.78 million sq. ft. or 41% of total leasing in the corresponding period last year.
Southern cities dominate GCC expansion
Southern India’s technology hubs continued to attract the bulk of GCC demand. Bengaluru emerged as the clear leader, with GCCs accounting for 70% of the city’s 10.8 million sq. ft. gross office absorption, translating into 7.55 million sq. ft.
Chennai followed, where GCCs leased around 1.75 million sq. ft., representing 55% of the city’s total office absorption of 3.2 million sq. ft. In Hyderabad, GCCs accounted for 48% of gross leasing, taking up about 3.05 million sq. ft. of the city’s 6.4 million sq. ft. office absorption.
Structural shift in office demand
Anarock Group Chairman Anuj Puri said the growing dominance of GCCs reflects a long-term transformation in India’s commercial real estate market rather than a temporary surge in demand.
“MNCs are increasingly expanding India-based GCCs to house core functions such as engineering, R&D, AI, finance, cybersecurity and digital operations. They are drawn by India’s deep talent pool, operating efficiency and mature office ecosystem,” he said.
According to Puri, these factors are expected to continue supporting both GCC expansion and overall commercial real estate absorption in the coming years.
Bengaluru, Hyderabad lead leasing
Bengaluru and Hyderabad together accounted for nearly 13.47 million sq. ft., or 49% of total net office leasing, during H1 2026.
Bengaluru recorded a 26% year-on-year increase in net leasing to around 8.27 million sq. ft., while Hyderabad posted a 24% growth to nearly 5.2 million sq. ft.
Meanwhile, the Mumbai Metropolitan Region (MMR) and National Capital Region (NCR) registered similar leasing volumes of 4.3 million sq. ft. and 4.27 million sq. ft., respectively. However, leasing declined 4% in MMR and 15% in NCR compared with the previous year.
Supply moderates, vacancies decline
The report noted that developers adopted a measured approach to new office supply. Fresh office completions declined 10% year-on-year to 22.15 million sq. ft. in H1 2026 from 24.51 million sq. ft. a year earlier.
With demand continuing to outpace new supply, the overall vacancy rate across the top seven cities eased to 15% from 16.3% in H1 2025.
Bengaluru saw vacancy levels fall from 12.4% to 10.8%, while Hyderabad’s vacancy declined from 26.6% to 23.5%, although it continued to have the highest vacancy among the seven cities.
Office rentals move higher
Healthy demand for premium Grade A office space also pushed up rentals. Average monthly office rentals across the top seven cities increased 9% year-on-year, rising from ₹88 per sq. ft. in H1 2025 to ₹96 per sq. ft. in H1 2026.
Bengaluru, NCR and Hyderabad each recorded 10% annual rental growth.
Puri said the moderation in new office supply reflects disciplined project launches rather than weakness in demand, helping maintain a healthy balance between leasing activity, vacancy levels and rentals.
Demand broadens beyond IT
While GCCs remained the primary growth engine, demand also came from sectors including BFSI, manufacturing and industrial companies, along with flexible workspace operators.
The report noted that flex-space operators accounted for 25% of office leasing, just one percentage point behind the IT/ITeS sector’s 26% share, highlighting the increasingly diversified nature of India’s office market.