India’s real estate sector demonstrated notable strength amid evolving market conditions in the first half of 2026. Office leasing reached 45.1 mn sq. ft. in H1 2026, the highest-ever half-yearly office leasing activity recorded. Capital inflows reached USD 8.5 bn in H1 2026, up ~32% Y-o-Y, marking the highest half-yearly volume since 2018.
The India Mid-Year Market Outlook FY2027 reassesses CBRE Research’s March projections, examining what each segment delivered, what changed since March and what to watch through March 2027.
How Did Each Segment Perform Against CBRE’s March 2026 Outlook?
|
Segment |
H1 2026 headline |
Assessment |
| Economy | 7.8% real GDP growth in Q1 FY2027, higher than the RBI’s projection | Ahead of Outlook |
| Office | 45.1 mn sq. ft. leasing | Ahead of Outlook |
| Retail | ~3.9 mn sq. ft. leasing, up ~20% Y-o-Y | Ahead of Outlook |
| Capital Markets | USD 8.5 bn capital inflows, up ~32% Y-o-Y | Broadly in Line |
| Industrial & Logistics | ~32 mn sq. ft. space take-up | Broadly in Line |
| Residential | ~129,200 units of housing sales | Broadly in Line |
| Data Centres | ~1.75 GW operational stock | Broadly in Line |
Source: CBRE Research, India Mid-Year Market Outlook FY2027, September 2026.
India’s FY2027 macroeconomic outlook has evolved against a more challenging global backdrop than initially anticipated, with geopolitical tensions and disruptions in the Strait of Hormuz heightening concerns over energy security, supply chains and inflation. Despite these headwinds, domestic economic activity remains resilient. The RBI raised its FY2027 GDP growth forecast to 6.7% in August 2026 (from 6.6% in June) and retained the policy repo rate at 5.25%.
What Is Driving Record Office Leasing in India?
Office was assessed as Ahead of Outlook. Supply additions reached 32.0 mn sq. ft., the highest for any H1 period, and office stock crossed the 1 bn sq. ft.+ milestone in Q2 2026 following sustained additions of investment-grade supply.
How Are GCCs Shaping Office Demand?
GCCs accounted for 43% of leasing activity, reinforcing their position as one of the primary demand drivers. They continued to scale high-value functions spanning innovation, engineering, product development and enterprise leadership, while the rise of mid-market and nano GCCs broadened the market’s growth base. The number of GCC deals grew 28% Y-o-Y in H1 2026, with these centres driving more than half of all transactions exceeding 100,000 sq. ft.
For the rest of FY2027, GCCs are projected to account for 40-45% of total absorption, driven by new entrants and by existing occupiers expanding across established hubs. 75% of such occupiers anticipate portfolio growth in the next two years. These indicators can help businesses assess when to establish or scale their GCC operations in India.
How Significant Is Flexible Space?
Flexible space operators led office absorption with a record 25% share of leasing activity in H1 2026, reflecting occupiers’ growing preference for solutions that support agility, cost efficiency and portfolio scalability.
Which Cities Led Office Leasing?
Bengaluru led space take-up and new supply additions in H1 2026, followed by Delhi-NCR, Hyderabad and Mumbai. Across major office markets, quality supply remained constrained in prime locations, with several new developments concentrated in peripheral areas.
Looking ahead, Bengaluru, Delhi-NCR and Mumbai are expected to lead total space take-up, with Pune and Chennai continuing to gain traction, supported by deep talent pools, infrastructure upgrades and proactive state policies. This reflects a broader occupier focus on accessibility and workforce convenience, with 70% of respondents prioritising commute infrastructure when selecting office locations.
What Does USD 8.5 Bn in Capital Inflows Tell Us About Investor Confidence?
Capital Markets was assessed as Broadly in Line, with capital deployments holding firm, supported by sustained domestic investor participation. The H1 2026 scorecard shows:
● USD 8.5 bn in capital inflows, up ~32% Y-o-Y.
● ~94% share of domestic investors in H1 capital inflows.
● ~92% share of capital deployed into land/development sites and office assets.
● ~USD 1.9 bn in investment and development platforms established.
Foreign participation remained limited, and domestic investors continued to be the principal source of capital, led by developers, listed REITs and institutional investors. Built-up office assets remained a key investment avenue, with such inflows rising fourfold year-on-year, closely followed by land/development sites across core and alternate sectors. Land acquisitions for office developments doubled compared with the same period last year, and the continued formation of investment and development platforms supported future capital deployment.
What Is Attracting Real Estate Investment?
● Growth and monetary stability. Real GDP grew 7.8% in Q1 FY2027, and Japan Credit Rating upgraded India’s sovereign credit rating to ‘A-‘ with a ‘stable outlook’ in September 2026.
● Foreign capital access. The RBI widened access to government securities and eased FPI investment limits, while the special forex-swap facility mobilised USD 136.4 bn, including USD 127.2 bn through FCNR(B) deposits.
● REIT reforms. The Taxation and Other Laws (Amendment) Act, 2026 received presidential assent in August 2026. It allows REIT/InvIT SPVs to opt for the concessional tax regime and use Minimum Alternate Tax (MAT) credits, while dividend distributions remain tax-exempt for investors.
Real estate investment momentum is expected to hold firm across office, I&L, residential, data centres, healthcare and hotels, among others. Foreign participation could strengthen in the second half of the current fiscal year.
What Does the Outlook Mean for Investors and Developers?
|
Segment |
H1 2026 performance |
Outlook through FY2027 |
| Data Centres | ~1.75 GW operational stock; ~130 MW added, up ~18% Y-o-Y | Capacity approaching 2.0-2.2 GW by end of 2026 |
| Industrial & Logistics | ~32 mn sq. ft. take-up, ~5% above H2 2025 | 3PL, e-commerce and E&M occupiers likely to remain primary demand drivers |
| Retail | ~3.9 mn sq. ft. leasing; Fashion & Apparel 40% share | Grade A supply pipeline of over 5 mn sq. ft. into suburban and peripheral corridors |
| Residential | ~129,200 units sold, ~142,000 launched | High-end segment expected to contribute 30-35% of overall sales |
Source: CBRE Research, India Mid-Year Market Outlook FY2027, September 2026.
In data centres, Mumbai accounted for a 52% share of India’s supply, followed by Chennai at 18% and Delhi-NCR at 11%. In I&L, Delhi-NCR, Chennai and Bengaluru collectively accounted for ~60% of H1 2026 absorption, and quoted warehousing rentals rose year-on-year across most major micro-markets.
In retail, domestic retailers held more than 70% of space take-up. With rental growth in prime locations nearing peak levels, the market observed a more calibrated approach towards evaluating overall space economics and long-term viability. In residential, developers increasingly adopted phased and tower-wise launches to better align new supply with demand, and apartment right-sizing could gain traction, as already seen in Pune, Hyderabad and Greater Noida.
Which Risks Should Decision-Makers Watch Through March 2027?
|
Indicator |
Latest reference point |
| Energy prices | Brent crude briefly above USD 119/bbl in April 2026 before retreating |
| Inflation | Retail inflation at 4.38% in June and 4.45% in July; RBI FY2027 CPI forecast of 5.0% |
| Policy rates | Repo rate at 5.25%, neutral, data-dependent stance |
| Foreign capital | Limited participation in H1 2026; could strengthen in H2 FY2027 |
| Trade policy | India-UK CETA in effect; U.S. placed Indian goods in a lower 10% tariff band |
| Residential demand | Market normalising from the elevated activity levels of 2023 and 2024 |
Source: CBRE Research, India Mid-Year Market Outlook FY2027, September 2026.
CBRE describes the FY2027 story as increasingly one of adaptability within a wider risk envelope. Resilient domestic demand, services activity, public capex and improving trade access could provide important offsets, and the festive period should offer a useful demand boost across consumption-linked sectors.
Frequently Asked Questions
What is the India real estate market outlook for FY2027?
CBRE Research assessed Economy, Office and Retail as Ahead of Outlook, and Capital Markets, Industrial & Logistics, Residential and Data Centres as Broadly in Line. H1 2026 recorded 45.1 mn sq. ft. of office leasing and USD 8.5 bn in capital inflows, the highest half-yearly volume since 2018.
What is driving office leasing in India in 2026?
GCCs accounted for 43% of leasing activity in H1 2026, and the number of GCC deals grew 28% Y-o-Y. Flexible space operators led absorption with a record 25% share. GCCs are projected to account for 40-45% of total absorption through the rest of FY2027.
What does USD 8.5 bn in capital inflows indicate?
Domestic investors accounted for ~94% of H1 capital inflows, and ~92% of capital was deployed into land/development sites and office assets. Foreign participation could strengthen in the second half of the current fiscal year.
Which Indian cities are leading office demand?
Bengaluru led space take-up and new supply additions in H1 2026, followed by Delhi-NCR, Hyderabad and Mumbai. Pune and Chennai are expected to continue gaining traction.
Key Takeaway
H1 2026 combined record office leasing with the highest half-yearly capital inflows since 2018, with domestic investors carrying much of the momentum. For occupiers, the signals point to portfolio quality, accessibility and talent availability as the criteria shaping decisions. For investors and developers, expanding REITs and development platforms, and a likely return of foreign capital in H2 FY2027, are broadening the investment landscape.
Read the full India Mid-Year Market Outlook FY2027, explore more research on CBRE India Insights, review available commercial spaces or contact CBRE India to discuss your requirements.
