India’s office buildings are evolving beyond traditional workplaces as multinational corporations expand their operations in technology, engineering, financial services, and research. This transformation is particularly evident in the rise of global capability centres (GCCs), which are shifting from back-office support roles to more complex functions such as product development, data analytics, artificial intelligence, cybersecurity, and research. This shift is not only altering the nature of employment in India but is also significantly impacting the demand for modern commercial real estate.

According to JLL’s report from January 2026, gross office leasing across India’s top seven cities reached 83.3 million square feet in 2025, marking a 7.8 per cent increase from the previous year. Net absorption, which measures the net change in occupied office space, hit 57 million square feet, the highest annual level recorded. GCCs played a crucial role in this activity, leasing approximately 31.4 million square feet, which accounted for 37.7 per cent of total gross office leasing.

The demand for commercial real estate is being fuelled by multiple sources, including global businesses expanding their operations in India, domestic companies, and flexible workspace operators. A report by CBRE India in March 2026 further corroborates this trend, indicating that GCCs leased over 100 million square feet between 2022 and 2025, representing around 39 per cent of total office leasing in 2025.

Changing Workspace Requirements for GCCs

The evolution of GCCs is reshaping the requirements for office spaces. As these centres adopt more specialised functions, there is a growing need for facilities that promote collaboration, advanced technology infrastructure, security, and an enhanced employee experience. Companies are also evaluating the importance of location, considering factors such as connectivity, the availability of suitable office buildings, and proximity to talent pools.

This shift presents opportunities for owners of well-located, professionally managed office properties. However, the benefits are not uniformly distributed across all buildings or markets. Companies have the flexibility to choose locations, negotiate lease terms, and adjust their space requirements as business conditions evolve. For Real Estate Investment Trusts (REITs), the implications depend on the quality of the assets they hold and their ability to attract and retain tenants.

A property located in a strong office market may still face challenges if it is poorly situated, requires significant investment, or fails to meet occupiers’ expectations. Conversely, a well-established building with competitive amenities and efficient operations may be better positioned to attract businesses seeking long-term office space.

Factors Influencing REIT Performance

The relationship between corporate leasing activity and REIT performance is critical, as rental income is a primary source of revenue for commercial properties. The terms of leasing agreements, including size, rental rates, lease duration, and escalation provisions, directly impact a REIT’s financial performance. Higher occupancy rates can bolster rental receipts, while vacancies may diminish income and increase the costs associated with finding replacement tenants.

However, occupancy should not be evaluated in isolation. Factors such as rental rates secured, tenant quality, lease expirations, and incentives offered to tenants are equally important. Rental growth varies significantly across cities and micro-markets, meaning that an increase in average office rents does not guarantee similar growth for every property.

Investors should focus on the operational performance of specific REITs rather than relying solely on broad market statistics. Quarterly results and annual reports can provide insights into whether leasing momentum is translating into sustained rental income, improved occupancy, and stronger cash flows.

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