- Record office leasing in India reached 24.6 million sq ft in Q2 CY2026, boosting H1 absorption.
- Global Capability Centres drove demand, taking 45% of gross office leasing in H1 CY2026.
- Residential pre-sales fell 26% YoY due to supply delays, not weaker demand in Q1 FY27.
India's real estate sector is moving in two directions at once. Grade A office space and the Real Estate Investment Trusts (REITs, listed vehicles that pool commercial property and pass on rental income to unit holders) built on it are having a record year, while listed residential developers just posted their weakest quarterly pre-sales in some time.
Gross office leasing across India's top cities touched a record 24.6 million sq ft in the June quarter, taking H1 CY2026 absorption to an all-time high of 45.5 million sq ft, according to Equirus Capital's Real Estate Sector Trends report. Net absorption of Grade A office space across the top seven cities came in at 27.4 million sq ft in H1 CY2026, up 2% year-on-year and well ahead of new completions of 22.2 million sq ft, which fell 10% YoY. That gap pulled average office vacancy down 130 basis points to a multi-year low of 15.0%, with every one of the seven cities recording an improvement.
Global Capability Centres, offshore units multinationals run in India for engineering, technology and back-office functions, drove much of the demand. GCCs took a record 45% share of gross office leasing in H1 CY2026, up 22% YoY to 19.2 million sq ft, with Bengaluru alone accounting for 7.6 million sq ft, or 39%, of the national GCC total. Average office rents rose 9% YoY to Rs 96 per sq ft a month, with south India absorbing 58% of national take-up.
ALSO READ: India's Top Eight Cities Report 6% Drop In Q1 Home Sales As Buyers Turn Cautious
REITs have scaled alongside this leasing boom. Equirus's REITs sector note attributes the momentum to leasing gains, rental growth and available developer-owned stock that together create "a window for accretive acquisitions and capital deployment." Their penetration of India's organised office stock has risen from 11.2% in 2021 to 19.1% in the March quarter, with the office stock held under REITs up 2.3 times to roughly 163 million sq ft, according to the same report. REIT market capitalisation has more than tripled since FY22, from Rs 65,000 crore to Rs 2,03,000 crore, and the unitholder base has grown nearly five times over, to 3.7 lakh holders.
Six REITs now trade in India, and Bengaluru dominates their combined portfolio, accounting for roughly Rs 1.3 lakh crore, or 46%, of the sector's Rs 2.8 lakh crore gross asset value.
A Rough Quarter for Housing
Housing tells a different story. Aggregate pre-sales of listed developers fell 26% YoY and 33% quarter-on-quarter to Rs 36,600 crore in the June quarter of FY27, largely on weak numbers from DLF and Prestige Estates, according to Equirus Securities' latest sector report. Strip out both developers and pre-sales actually grew 12% YoY, even though they were still down 31% sequentially.
India's real estate sector is going in two directions.
Photo Credit: NDTV Profit
The bigger drag was on the supply side, not demand. Developers launched just 38.1 million sq ft of new projects in the quarter, down 20% YoY, achieving only 17% of their revised full-year launch guidance of Rs 2.6 lakh crore. Equirus Securities analysts Jainam Shah and Prajwal Rathore put this down to "approval-led delays and deliberate launch phasing" rather than falling demand, noting that most developers have retained their FY27 launch pipelines intact, with a bulk of large projects scheduled for the second half of the year.
One number stood out on the execution side: collection efficiency, or how much of billed dues developers actually recovered, jumped to 75% in the June quarter from 49% a year earlier and 65% in the March quarter, a sign that construction progress and billing on already-sold inventory picked up pace even as fresh bookings slowed.
Taken together, the reports suggest India's real estate cycle isn't cooling so much as splitting: commercial assets, backed by GCC demand and a fast-scaling REIT market, are compounding steadily, while residential developers work through a supply bottleneck that most expect to clear by the second half of FY27.
WATCH:
Essential Business Intelligence, Sharp Market Insights, Practical Personal Finance Advice, Daily Fuel, Gold and Silver Prices and Latest Stories — On NDTV Profit.