India’s largest IT services exporter, Tata Consultancy Services (TCS), has inked one of Bengaluru’s biggest commercial real estate transactions in recent memory, reaffirming the city’s dominance as the country’s technology capital even amid signs of consolidation in the sector.

The company has leased a mammoth 1.4 million sq ft of office space at 360 Business Park in Electronic City, committing to a 15-year tenancy valued at around ₹2,130 crore. The deal, among the top office space transactions Bengaluru has seen in recent years, comes at a time when global tech giants and financial institutions alike are expanding their India footprint with large-format campuses.

It also reflects the rebound in demand for Grade-A office space by third-party IT services companies, which drove a nearly threefold jump in leasing volumes in the first half of 2025, according to Knight Frank.

However, the move is unfolding against a complex backdrop: while corporates are doubling down on large office requirements, IT majors including TCS are simultaneously tightening headcounts—raising questions about whether Bengaluru’s overheated commercial and housing markets could be due for a correction.

Earlier this year, Google opened its Ananta campus in Bengaluru, a 1.6 million sq ft facility in Mahadevapura that is also its largest office in India. In 2024, Morgan Stanley leased 1 million sq ft in Mumbai on a nine-year term, with a starting monthly rent of ₹15.96 crore. Against this backdrop, the TCS deal is among the largest commercial real estate transactions Bengaluru has seen in recent years, experts said.

“Third-party IT Services made a strong comeback in H1 2025, with transaction volumes jumping 189% compared to H1 2024. The segment was driven by large-format deals, reflecting renewed confidence among tech occupiers.” Vivek Rathi, National Director- Research, Knight Frank India, said.

Experts said that third-party IT Services also witnessed some of the largest transactions in Bengaluru’s office market during H1 2025, signalling a strong revival in expansion-led demand.

“One of the defining trends in Bengaluru’s overall office market was the surge in average deal size, with the top 10 transactions accounting for nearly 50% of total leasing,” Rathi said.

According to the documents, the TCS lease will commence in two phases. Phase 1, comprising ground plus seven floors, is scheduled to start from April 1, 2026, while Phase 2, covering the 8th to 13th floors, will commence from August 1, 2026. Together, the two towers will add more than 1.4 million sq ft of Grade-A workspace for the IT services giant.

With TCS announcing plans to trim its workforce by 2% in FY26, amounting to more than 12,000 employees, there have been concerns about the ripple effects on India’s property market. Bengaluru, the country’s tech capital, has seen housing costs soar in recent years, especially in hubs like Whitefield, Bellandur, and Electronic City. But the wave of IT sector layoffs is now fuelling speculation that a correction in both rentals and capital values may be looming, say real estate experts.