India Real Estate Demand Splits Across Property Segments

India’s property market is entering a more uneven phase, with offices, flexible workspaces and logistics assets gaining traction while residential inventory continues to build across major cities. The shift matters beyond developers and investors: it signals changing patterns of employment, consumption and land use, with cities needing to align new construction more closely with actual demand.

Office markets provided the clearest sign of strength in the first half of 2026. Net absorption across the seven largest cities reached 27.4 million sq ft, a 2% annual increase, even as completions fell 10% to 22.2 million sq ft. Vacancy declined to 15%, its lowest level in several years. Global capability centres (GCCs), which house technology and other specialised corporate functions, were a major source of leasing activity. Their take-up rose 22% to 19.2 million sq ft, accounting for about 45% of gross office leasing. This concentration of demand could support jobs and commercial districts, but it also places pressure on transport, housing and public services around employment clusters.Flexible workspace is becoming another structural feature of the office market. Operators leased more than 191,000 seats during H1 2026, up 68.4% from a year earlier. Their share of office leasing rose to about one-fifth from 13% previously. For cities, the trend could encourage more adaptable workplaces, but sustained growth will also depend on reliable public transport and efficient use of existing buildings.

Logistics demand was stronger still. Industrial and logistics leasing across eight major cities climbed 18% to 36.2 million sq ft. Warehousing made up 67% of this absorption, while third-party logistics firms accounted for 12.2 million sq ft. The expansion reflects India’s growing consumption and distribution networks, increasing the importance of planning freight corridors alongside residential and commercial growth.Housing, however, is showing a different pattern. Unsold residential stock across eight major markets reached 525,695 units by H1 2026, up 4% year-on-year. The time needed to clear this stock also increased to six quarters from 5.8 quarters at the end of 2025.

The pressure is particularly visible in Ahmedabad, where inventory stood at 8.1 quarters, and the National Capital Region at 7.6 quarters. Yet luxury supply remains ambitious, with nearly ₹1 lakh crore of high-end launches reportedly being planned in Gurugram during H2 FY27.The divergence suggests that India real estate is increasingly being shaped by employment and logistics demand on one side and affordability and absorption on the other. India real estate growth will therefore depend less on construction volumes alone and more on whether new projects match household needs, jobs, mobility and climate-resilient infrastructure.

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India Real Estate Demand Splits Across Property Segments