Beyond Return-to-Office

For the past few years, workplace conversations have centred on one question: Are employees returning to the office? In 2026, that question is no longer sufficient. Employees are returning, but companies are not simply restoring pre-pandemic office models. They are rethinking how their workplaces support growth, talent, flexibility and long-term business strategy.

India’s top seven cities recorded 42.6 million sq ft of office leasing in H1 2026, with Global Capability Centres (GCCs) accounting for 45% of gross leasing. Pan-India office vacancy also declined to 15% from 16.3% a year earlier. These figures point to a strong office market, but the deeper story lies in demand. Companies are asking not only how much space they need, but also where it should be located, what quality it should offer and what purpose it should serve.

Corporate real estate was once driven largely by headcount. More employees meant more desks and more space. Today, office decisions are more closely linked to business priorities. A company may expand its GCC in Bengaluru, consolidate offices in Mumbai, use managed workspace in Gurugram and exit an inefficient building elsewhere, all at the same time.

The growth of GCCs illustrates this shift. GCCs accounted for 45% of gross office leasing in H1 2026, compared with 41% in H1 2025, representing approximately 19.2 million sq ft. Bengaluru recorded around 8.27 million sq ft of GCC absorption, while Hyderabad recorded 5.2 million sq ft.

This demand is not simply the result of employees returning to their desks. It reflects long-term decisions about where companies will locate technology, engineering, analytics, finance, research and other strategic functions. GCC expansion is therefore strengthening the connection between corporate strategy and real estate strategy.

The pandemic also prompted companies to question the efficiency of their existing portfolios. Should fragmented offices be consolidated? Should older buildings be retained? Is a long-term lease appropriate for a business with uncertain growth? Does lower rent compensate for poor connectivity or difficulty attracting talent?

As a result, the next phase of office leasing in India is likely to be shaped as much by portfolio optimisation as by expansion. Companies may take more space, less space or simply better space, depending on their business needs.

Demand is increasingly concentrated in high-quality Grade A developments. Anarock Research recorded approximately 27.44 million sq ft of Grade A net absorption in H1 2026, up 2% year-on-year.

However, Grade A is no longer defined only by a premium lobby, efficient floor plates or a prominent address. Occupiers are evaluating connectivity, commute times, amenities, sustainability, energy efficiency, digital infrastructure, building management and the reliability of the landlord.

This is creating a shift from building versus building to ecosystem versus ecosystem. A well-designed office cannot fully compensate for poor access, weak amenities or inconsistent operations. Similarly, sustainability credentials must be supported by measurable building performance.

For developers and landlords, the implication is clear: future competitiveness will depend not only on delivering space, but on creating workplaces that support employee experience, operational resilience and corporate sustainability goals.

Flexible workspace is also moving beyond its earlier image as a temporary solution. It accounted for close to 20% of the commercial leasing transactions in 2025 in India, while enterprises represented more than one-third of flex-workspace adoption by number of organisations.

For a GCC entering a new city, managed workspace can provide an incubation platform before a permanent facility is established. For an established company, it can accommodate project teams, sudden hiring or expansion into a new market without requiring an immediate long-term commitment.

The relevant question is therefore no longer whether companies should choose conventional or flexible offices. It is which format is appropriate for each part of the portfolio.

A blended model may include a core Grade A campus, dedicated offices for specialised teams and flexible space for experimentation, expansion or variable demand. Flexibility is not necessarily a sign of hesitation; it can reflect a more disciplined approach to commitment.

Corporate real estate portfolios are increasingly being managed like investment portfolios. Different locations serve different purposes: stability, talent access, collaboration, client engagement, expansion or resilience.

This also changes how efficiency is measured. The lowest rent may not represent the lowest overall cost if it leads to longer commutes, higher attrition or weaker talent

attraction. Likewise, managed workspace may appear expensive on a per-square-foot basis but prove valuable if it enables rapid market entry without premature capital commitment.

The next office-market cycle will therefore be defined by relevance. Occupiers will favour workplaces that combine connectivity, quality, flexibility, sustainability and reliable operations. Landlords and investors will need to ensure that assets can evolve with changing occupier expectations.

The most important transformation in India’s office market is not simply that employees are returning to workspaces. It is that companies are beginning to treat the workplace as a strategic portfolio rather than a collection of leases.

The successful office of the future will not be defined merely by how much space it provides. It will be defined by why that space exists and what it enables the business to achieve.