The first half of 2026 offers a clear strategic signal for anyone making real estate decisions in India: the market absorbed a harder global environment without losing momentum. Office leasing reached 45.1 mn sq. ft., the highest half-year on record, and capital inflows hit USD 8.5 bn, up roughly 32% year-on-year and the strongest half-yearly figure since 2018.
The India Mid-Year Market Outlook FY2027 tests CBRE Research’s March projections against what actually played out, segment by segment, and sets out what’s changed and what decision-makers should be watching through March 2027.
Scorecard: Segment Performance Against the 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.
The FY2027 macro backdrop has turned out tougher than initially modelled, with geopolitical tension and disruption around the Strait of Hormuz adding pressure on energy security, supply chains, and inflation. That said, domestic resilience is the more important strategic fact: the RBI raised its FY2027 GDP growth forecast to 6.7% in August 2026, from 6.6% in June, while holding the policy repo rate at 5.25%.
The Strategic Drivers Behind Record Office Leasing
Office was assessed as Ahead of Outlook. Supply additions reached 32.0 mn sq. ft., the highest for any H1 on record, and total office stock crossed the 1 bn sq. ft. mark in Q2 2026 on sustained investment-grade additions.
Decision Driver: GCC Expansion
GCCs accounted for 43% of leasing activity, reinforcing their role as a primary demand engine. They continued scaling high-value functions across innovation, engineering, product development, and enterprise leadership, while a broader base of mid-market and nano GCCs extended the market’s growth beyond the largest players. GCC deal volume rose 28% year-on-year in H1 2026, and these centres drove more than half of all transactions above 100,000 sq. ft.
Through the rest of FY2027, GCCs are projected to represent 40-45% of total absorption, driven by both new entrants and existing occupiers expanding across established hubs. 75% of these occupiers expect portfolio growth over the next two years, a data point worth weighing directly into any decision on the timing of GCC operations in India.
Decision Driver: The Shift Toward Flexible Space
Flexible space operators led office absorption in H1 2026 with a record 25% share of leasing, a signal that occupiers are increasingly building agility, cost efficiency, and portfolio scalability directly into their real estate strategy rather than treating flexible space as a stopgap.
Decision Driver: Where Demand Is Concentrated
Bengaluru led both space take-up and new supply in H1 2026, followed by Delhi-NCR, Hyderabad, and Mumbai. Across major office markets, quality supply in prime locations stayed constrained, pushing a meaningful share of new development into peripheral areas instead.
Looking ahead, Bengaluru, Delhi-NCR, and Mumbai are expected to keep leading total take-up, with Pune and Chennai gaining further traction on the back of deep talent pools, infrastructure upgrades, and proactive state policy. That reflects a broader strategic shift toward accessibility and workforce convenience, with 70% of respondents prioritising commute infrastructure in office location decisions.
What USD 8.5 Bn in Capital Inflows Signals for Investor Confidence
Capital Markets was assessed as Broadly in Line, with deployment holding firm on sustained domestic investor participation. The H1 2026 scorecard:
● 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 stayed limited, leaving domestic investors, led by developers, listed REITs, and institutional investors, as the principal source of capital. Built-up office assets remained a key investment avenue, with inflows into them rising fourfold year-on-year, closely followed by land and development sites across core and alternate sectors. Land acquisitions for office developments doubled against the same period last year, and continued formation of investment and development platforms is building capacity for future capital deployment.
The Variables Attracting Capital
● 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.
Investment momentum is expected to hold across office, I&L, residential, data centres, healthcare, and hotels, among other segments, with foreign participation a plausible strengthening factor in the second half of the fiscal year.
Strategic Implications 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 held a 52% share of India’s supply, followed by Chennai at 18% and Delhi-NCR at 11%. In industrial and logistics, Delhi-NCR, Chennai, and Bengaluru collectively accounted for around 60% of H1 2026 absorption, with quoted warehousing rentals rising year-on-year across most major micro-markets.
In retail, domestic retailers held more than 70% of space take-up. As rental growth in prime locations nears peak levels, the strategic calculus is shifting toward a more calibrated read on overall space economics and long-term viability. In residential, developers are increasingly adopting phased and tower-wise launches to better align supply with demand, and apartment right-sizing could become a broader trend, following the pattern already visible in Pune, Hyderabad, and Greater Noida.
Risk Factors to Track 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 frames the FY2027 narrative as increasingly about adaptability within a wider risk envelope. Resilient domestic demand, services activity, public capex, and improving trade access are plausible offsets, and the festive period should provide a useful demand boost across consumption-linked sectors, factors worth building into any near-term planning.
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.
The Strategic Takeaway
H1 2026 paired record office leasing with the strongest half-yearly capital inflows since 2018, with domestic investors driving much of that momentum. For occupiers, the strategic signal is that portfolio quality, accessibility, and talent availability are now the criteria shaping decisions, not just rent. For investors and developers, expanding REITs and development platforms, together with a likely return of foreign capital in H2 FY2027, are widening the set of options on the table.
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.