India Office Space Hits Record High as Retail Shifts to High Streets

India's commercial real estate market showed diverging trends in 2026, with the office sector hitting record highs while retail leasing faced supply constraints. Between January and September, CBRE South Asia reported record office absorption of 66.4 million square feet, an 8 percent year-on-year increase. Global Capability Centres drove 42 percent of this growth, with strong demand for premium Grade A+ assets and flexible office spaces. Three-quarters of the space taken in the third quarter was in buildings under ten years old.

In contrast, retail leasing volume fell to 2.22 million square feet in Q3 2026, a 4.4 percent decrease year-on-year. According to Cushman & Wakefield, mall leasing dropped 38 percent to 0.71 million square feet as Grade A mall vacancy tightened to 4.8 percent. This scarcity pushed retailers toward high streets, where leasing rose 33 percent to 1.51 million square feet, accounting for 67.9 percent of total retail activity. Domestic retailers contributed 86.3 percent of this leasing volume.

To address the retail shortage, a pipeline of 12.7 million square feet of new Grade A mall supply is projected through 2028, with Delhi NCR leading the development. Meanwhile, the office sector continues to expand, with 77 percent of occupiers expecting to grow their Indian portfolios over the next two years, supported by strong talent pools in cities like Hyderabad, Bengaluru, and Pune.