India’s office market witnessed a significant milestone in Q1 2026, with a record 21.5 million square feet of gross leasing. This surge was primarily fueled by the demand from Global Capability Centres (GCCs) and flexible workspace operators, as highlighted in a report by JLL. The report indicated a 10.2% year-on-year increase in gross leasing, with GCCs contributing 45.5% and flex operators 25.9% to the demand.
The rise in leasing activity reflects a shift in how global enterprises utilize India, with GCCs expanding their presence by 43% year-on-year to reach 10 million square feet. These centers are no longer just back-office setups but are evolving into strategic innovation hubs focusing on AI development, digital engineering, and core product development, according to Rahul Arora, Head of Office Leasing & Retail Services at JLL.
Market fundamentals are strengthening, evident from the pan-India vacancy rate dropping to a five-year low of 14.7%. Additionally, net absorption hit a record high of 13.7 million square feet for the quarter. Bengaluru emerged as the leader in Q1 leasing volumes, capturing a 24.8% share, followed by Mumbai at 19.5% and Hyderabad at 16.8%. Pune and Delhi-NCR also made notable contributions, with 14.5% and 14.2% shares, respectively.
Bengaluru stood out with GCCs driving 70% of the city’s quarterly gross leasing activity, the highest share in two years. The tech and BFSI sectors dominated leasing within GCCs, with global-headquartered firms maintaining a 57% share in India’s office leasing landscape. Domestic occupier activity was primarily led by indigenous flex operators, constituting 57.8% of the total space leased during the quarter.
