Knight Frank Reports Office Leasing Dip as Home Sales Hold in H1 2026

India’s office leasing market lost some momentum during the first half of 2026, while residential housing demand remained broadly stable across major urban centres, highlighting a changing phase in the country’s real estate cycle. The latest market assessment suggests that commercial occupiers are becoming more selective amid global economic uncertainty, even as homebuyers continue to support housing demand in leading metropolitan regions.

Across India’s principal property markets, commercial real estate activity reflected contrasting trends between demand and available supply. While leasing volumes in office spaces softened marginally compared with the same period last year, analysts point to limited availability of high-quality Grade A commercial assets rather than weakening business confidence alone. Several cities continued to attract occupiers from technology, financial services and Global Capability Centres (GCCs), although transaction timing and expansion decisions became more measured in response to evolving international market conditions.

The office leasing outlook also reflects an increasingly competitive landscape where businesses are prioritising operational efficiency, sustainability credentials and workplace flexibility before committing to long-term commercial space. Urban planners note that the growing preference for energy-efficient buildings and transit-connected business districts is gradually reshaping investment decisions, reinforcing the importance of environmentally responsible commercial development within India’s expanding cities. In contrast, the residential market has demonstrated resilience despite affordability concerns in several metropolitan regions. Demand for homes has remained relatively steady, supported by continued urban migration, infrastructure expansion and sustained end-user purchases rather than speculative investment. Market observers indicate that while rapid price appreciation witnessed over recent years has moderated buying activity in some premium segments, demand for well-connected housing continues to underpin sales volumes.

Industry experts believe this divergence between commercial and residential performance signals a broader market recalibration rather than structural weakness. Developers are increasingly aligning project launches with actual demand, while institutional investors remain focused on income-generating commercial assets with strong occupancy prospects. The trend also highlights the growing importance of integrated urban planning that balances employment centres with accessible housing and public infrastructure. For city administrations, these shifts underline the need to accelerate approvals for sustainable commercial developments alongside affordable and mid-income housing. Better transport connectivity, climate-resilient infrastructure and mixed-use neighbourhoods are expected to become more influential in determining where future investment is directed. Looking ahead, the real estate sector is likely to remain supported by India’s long-term urbanisation story. However, the pace of expansion will increasingly depend on the availability of quality commercial supply, stable financing conditions and planning frameworks that encourage resilient, inclusive and environmentally responsible urban growth. As cities continue to evolve, maintaining equilibrium between workplace expansion and housing accessibility will remain central to sustaining economic productivity and improving urban liveability.

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Knight Frank Reports Office Leasing Dip as Home Sales Hold in H1 2026