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India’s real estate sector is poised for a transformative phase in 2026, driven by evolving occupier preferences, deeper institutional participation, sustainability imperatives, and the rapid decentralization of growth beyond traditional urban cores. As global uncertainty persists, India’s structural strengths, cost competitiveness, talent depth, and policy support continue to position the country as a compelling real estate market. The year ahead is expected to be defined by the following key trends.
GCCs to Drive Office Demand
GCCs will continue to be the cornerstone of office demand in India. Their share in total office absorption is anticipated to increase from around 40% currently to nearly 45–50% by the end of 2026. While technology firms have historically dominated GCC leasing activity, demand is now expanding across various sectors, including BFSI, healthcare, manufacturing, engineering, and R&D. This diversification will not only sustain demand momentum but also broaden geographical preferences and office space formats.
Flex Premiumization on the Rise
Flex spaces are evolving rapidly, moving beyond interim solutions to become strategic components of corporate real estate portfolios. Nearly 60% of GCC bases currently operate out of green-certified Grade A flex centers, highlighting a strong preference for quality and sustainability. More than 475 of the 1,400 flex centers across major Tier-1 cities already host GCCs, and this footprint is expected to expand further as enterprises focus on their core business operations and prioritize rapid scalability.
Plug-and-Play Models to Garner Momentum
As occupiers prioritize speed-to-market amid rapidly changing demand–supply dynamics, plug-and-play office models are expected to gain significant traction in 2026. These formats enable minimal setup time, faster geographic expansion, and predictable costs, making them especially attractive for GCCs, startups, and companies entering new markets.
Sustainability to Dominate Real Estate Decisions
Sustainability will move from a differentiator to a baseline expectation in 2026. Over 80% of upcoming office supply is expected to be green-certified, pushing overall green penetration beyond 70%, up from about 65% today. In parallel, older office buildings are likely to undergo retrofits and operational upgrades to align with green certification requirements. Energy efficiency, water management, and occupant well-being will increasingly influence both leasing and investment decisions.
Further Institutionalization of the Sector
India’s real estate sector is steadily institutionalizing, led by the growth of REITs. Office assets dominate REIT portfolios, collectively spanning over 135 Mn sq ft. With India’s total office stock exceeding 1 Bn sq ft, nearly 500 Mn sq ft is considered REIT-worthy, while another 34 Mn sq ft is already tied to existing pipelines.
On the retail front, Nexus Select Trust remains India’s only listed retail REIT, despite the country having over 89 Mn sq ft of Grade A retail stock. Only 10.6 Mn sq ft is currently under REITs, indicating an institutional opportunity nearly eight times the existing scale. Beyond offices and malls, the next wave of REITs is expected to include warehousing, industrial parks, logistics facilities, and data centers.
Redevelopment to Reshape City Skylines
Redevelopment activity is set to accelerate in mature Tier-1 markets such as Mumbai, Bengaluru, and NCR. Supportive FSI norms and the growing adoption of public-private partnership (PPP) models are expected to unlock underutilized land parcels and aging assets. This trend will reshape city skylines while refreshing demand–supply dynamics in established micro-markets.
Rapid Expansion of Tier-2 Cities
Tier-2 cities are emerging as the next growth engines of Indian real estate. Reputed developers are expected to expand into these markets to capitalize on rising demand, improving infrastructure, and relatively affordable land prices. Enhanced connectivity and proactive state policies—such as Bengaluru’s GCC policy’s focus on developing regions beyond the city core—will further accelerate real estate activity across secondary cities.
Peripheral Areas Continue to Gain Traction
Within Tier-1 cities, peripheral locations are increasingly becoming the preferred destinations for large-scale developments. Improved intra-city connectivity, coupled with escalating land prices in central business districts, has pushed developers and occupiers toward these fringes. Abundant land availability in peripheral areas also ensures long-term expansion potential, particularly for campuses, data centers, and mixed-use developments.
Edge Data Centers Take Centre Stage
The accelerating adoption of AI, cloud computing, and digital services is driving demand for edge data centers to ensure low latency and minimal ping times. India presents substantial upside potential due to strong domestic demand, rising data consumption, and its strategic geographic position. Edge data centers are likely to become an integral part of urban and peripheral real estate ecosystems.
Rising Institutional Investments by Foreign Players
Foreign investor confidence in Indian real estate has seen a sharp revival. In Q4 2025, foreign investments accounted for 41% of total inflows, up from just 8% in the previous quarter. In value terms, foreign investments surged more than tenfold to USD 1.5 Bn quarter-on-quarter. Co-investment structures are also expected to gain prominence as global investors adopt a cautious yet strategic approach amid ongoing geopolitical and economic uncertainty.
Overall, 2026 is set to be a year of structural strengthening for Indian real estate. The convergence of GCC-led demand, sustainability-driven development, deeper institutional participation, and geographic diversification will redefine how assets are planned, built, and invested in. As the sector matures, agility, resilience, and long-term value creation will remain at the heart of India’s real estate growth story.
