India’s property market held up well through the first half of 2026, even as global conditions got trickier. Office leasing hit 45.1 mn sq. ft. in H1 2026, the strongest half-year on record, and capital inflows reached USD 8.5 bn, up roughly 32% year-on-year and the highest half-yearly number since 2018.
The India Mid-Year Market Outlook FY2027 takes CBRE Research’s projections from March and checks them against what actually happened, segment by segment, what’s shifted since, and what to watch through March 2027.
How Did Each Segment Stack Up 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.
India’s macro picture for FY2027 has played out against a tougher global backdrop than expected, with geopolitical tension and disruption around the Strait of Hormuz adding pressure on energy security, supply chains, and inflation. Even so, domestic activity has held firm. The RBI bumped its FY2027 GDP growth forecast up to 6.7% in August 2026, from 6.6% in June, and kept the policy repo rate steady at 5.25%.
What’s Behind the Record Office Leasing Numbers?
Office came in Ahead of Outlook. New supply hit 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 the back of continued investment-grade additions.
The GCC Effect on Office Demand
GCCs made up 43% of leasing activity, confirming their place as one of the biggest drivers of demand. They kept scaling high-value work across innovation, engineering, product development, and enterprise leadership, while a growing wave of mid-market and nano GCCs widened the base of growth. GCC deal volume grew 28% year-on-year in H1 2026, and these centres were behind more than half of all transactions above 100,000 sq. ft.
For the rest of FY2027, GCCs are expected to make up 40-45% of total absorption, pushed along by new entrants and existing occupiers expanding in established hubs. 75% of these occupiers expect portfolio growth over the next two years. That’s useful context for businesses weighing when to set up or scale GCC operations in India.
Why Flexible Space Is Taking a Bigger Share
Flexible space operators led office absorption in H1 2026, taking a record 25% share of leasing, as more occupiers lean toward solutions that give them agility, cost efficiency, and the ability to scale their portfolio up or down.
Where Office Leasing Was Concentrated
Bengaluru led both space take-up and new supply in H1 2026, with Delhi-NCR, Hyderabad, and Mumbai close behind. Across the major office markets, good-quality supply in prime locations stayed tight, with much of the new development pushed out to peripheral areas instead.
Looking ahead, Bengaluru, Delhi-NCR, and Mumbai are expected to keep leading total take-up, while Pune and Chennai continue gaining ground, helped by deep talent pools, infrastructure upgrades, and supportive state policy. That lines up with a broader occupier focus on accessibility and ease of commute, with 70% of respondents putting commute infrastructure among their top site-selection priorities.
What Does USD 8.5 Bn in Capital Inflows Say About Investor Confidence?
Capital Markets came in Broadly in Line, with deployment staying firm thanks to steady participation from domestic investors. Here’s 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, with domestic investors remaining the main source of capital, led by developers, listed REITs, and institutional investors. Built-up office assets stayed a key destination for this capital, 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 projects doubled compared to the same period last year, and the ongoing formation of investment and development platforms is setting up future capital deployment.
What’s Pulling Investment Into Real Estate?
● 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 looks set to hold across office, I&L, residential, data centres, healthcare, hotels, and more. Foreign participation could pick up in the second half of the fiscal year.
What Should Investors and Developers Take From the Outlook?
| 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 together accounted for around 60% of H1 2026 absorption, and quoted warehousing rents rose year-on-year across most major micro-markets.
In retail, domestic retailers held more than 70% of space take-up. With rental growth in prime locations getting close to peak levels, the market took a more measured approach to weighing overall space economics and long-term viability. In residential, developers increasingly moved toward phased and tower-wise launches to better match new supply with demand, and apartment right-sizing could pick up, as already seen in Pune, Hyderabad, and Greater Noida.
What Risks Should Decision-Makers Keep an Eye On 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 story as increasingly about adaptability within a wider set of risks. Resilient domestic demand, services activity, public capex, and improving trade access could all help offset those pressures, and the festive period should give a useful lift to demand across consumption-linked sectors.
Common 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 Bottom Line
H1 2026 brought together record office leasing and the strongest half-yearly capital inflows since 2018, with domestic investors driving much of that momentum. For occupiers, the signals point toward portfolio quality, accessibility, and talent availability as the factors shaping decisions. For investors and developers, growing REITs and development platforms, plus a likely return of foreign capital in H2 FY2027, are opening up the investment landscape.
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.
