GCC Boom Offsets 36% Fall in IT Services Leasing in India
India's office leasing market remains steady at 66.7 million sq ft as GCC demand rises, offsetting a 36% drop in third-party IT services leasing.
India's office leasing market has demonstrated remarkable resilience, maintaining a steady demand despite a significant downturn in traditional IT services leasing. According to a recent report by Knight Frank India, office leasing across eight major Indian markets remained stable at 66.7 million square feet during the first nine months of 2026.
The Shift in Demand Composition
While the total volume of leasing remained consistent with the previous year, the underlying drivers of this demand have undergone a fundamental transformation. The market is witnessing a strategic shift as Global Capability Centres (GCCs) expand their footprint, effectively compensating for a sharp contraction in third-party IT and IT-enabled services (ITeS) leasing.
The report highlights a significant surge in GCC activity:
- GCC Market Share: GCCs now account for 41 per cent of total office leasing, up from 37 per cent in the same period last year and 31 per cent in 2024.
- GCC Growth: Leasing by GCCs rose by 10.4 per cent year-on-year, reaching 27.4 million square feet compared to 24.8 million square feet in the first nine months of 2025.
IT Services Leasing Faces Sharp Decline
In stark contrast to the GCC boom, third-party IT and ITeS companies have seen their leasing activity plummet. These companies leased 9 million square feet during the January-September 2026 period, a significant drop from the 14.1 million square feet recorded a year earlier. This represents a 36 per cent year-on-year decline.
The decline in IT services leasing was most pronounced in major hubs such as Bengaluru, Chennai, and the National Capital Region (NCR). Meanwhile, Hyderabad emerged as the leader in this specific category, recording the highest leasing volume at 2.9 million square feet.
Rising Rents Across Major Markets
The report also noted an upward trend in commercial real estate costs, with office rents recording annual growth across all eight major markets. The annual rental increases ranged from 3 per cent to 13 per cent during the third quarter.
Key rental growth highlights include:
- Kolkata: Recorded the highest annual increase at 13 per cent.
- NCR: Followed closely with a 12 per cent increase.
- Hyderabad: Saw a 9 per cent rise.
- Mumbai: Noted the strongest quarter-on-quarter rental growth at 4 per cent.
A New Era for Indian Office Spaces
Shishir Baijal, International Partner, Chairman and Managing Director of Knight Frank India, noted that the market is undergoing a structural evolution. He stated that the expansion of GCCs, combined with the growing contribution of flexible workspace operators and India-facing businesses, reflects India's increasing importance in global capability building and domestic economic expansion.
As the market enters the final quarter of 2026, analysts expect continued leasing activity, supported by a broader and more diversified base of occupiers.