Corporate real estate (CRE) leaders are navigating a phase of strategic recalibration, where organisations are required to deliver cost efficiencies while simultaneously investing in long-term transformation. According to Knight Frank’s (Y)OUR SPACE Horizon Report – H1 2026, this evolving approach is reshaping how companies structure workplace portfolios, adopt technology and evaluate location strategies.

Based on a survey of senior CRE leaders globally, 70.8% believe organisations can achieve immediate cost savings while continuing to invest in long-term transformation initiatives. This reflects a shift away from the traditional ‘optimise now, transform later’ approach. The role of CRE is also becoming more central to enterprise decision-making, with over 53% of respondents expecting CRE teams to play a more strategic role across talent, risk management and broader business transformation.

Technology continues to play a critical role in workplace strategy. The report highlights that 50.8% of organisations are willing to integrate artificial intelligence to enhance productivity, largely through targeted deployment within core workflows rather than large-scale workplace redesign.

Quality and Performance Take Priority

The survey indicates a clear global pivot from expansion-led strategies toward optimisation of existing portfolios and investment in high-performing workplaces. Sentiment toward physical footprint expansion remains muted, with organisations prioritising sustainably accredited buildings and workspaces designed to support collaboration, learning and innovation.

India’s office market performance reflects how these evolving priorities are translating into real estate decisions. While several global markets remain focused on portfolio optimisation, India continues to witness sustained demand as organisations invest in capability-led operations and higher-quality workplaces.

Office leasing across India’s major markets reached 86.4 million sq ft in 2025, marking a 20% year-on-year (YoY) increase and a 43% rise compared with the pre-pandemic peak of 2019.

Capability-Led Demand Drives India’s Growth

One of the most visible outcomes of these trends is the continued expansion of Global Capability Centres (GCCs) in India. In 2025, GCCs leased approximately 32.6 mn sq ft of office space, accounting for 38% of total leasing activity.

These centres are increasingly evolving beyond traditional support functions and are now undertaking complex and strategic roles across technology, analytics, research and product development.

Shishir Baijal, International Partner, Chairman and Managing Director, Knight Frank India, said, “India’s strong leasing performance reflects its growing strategic relevance in global corporate real estate strategies. As organisations invest in capability-led operations and higher-quality workplaces, India continues to benefit from its deep talent pool and a rapidly evolving office ecosystem. Corporate real estate leaders today are expected to deliver cost efficiency and transformation in parallel, and the findings indicate that these are no longer competing priorities but aligned drivers shaping workplace decisions.”

India’s office market is also mirroring the global shift toward performance-led workplace strategies. Flexible workspace operators recorded their highest-ever annual absorption in 2025, leasing 18.6 million sq ft, reflecting an 18% YoY increase.

At the same time, occupiers continue to show a strong preference for high-quality buildings that support productivity and sustainability goals. Grade A office assets accounted for 91% of leasing transactions in 2025, reinforcing the growing focus on workplace quality.

As organisations continue to balance operational efficiency with long-term transformation, India’s office market is expected to remain a key hub for enterprise expansion and capability-led real estate strategies.