India's real estate sector achieved unprecedented office leasing milestones in Q2 CY2026, with gross office leasing reaching a record 24.6 million sq ft, driving H1 CY2026 absorption to an all-time high of 45.5 million sq ft, according to Equirus Capital's Real Estate Sector Trends report. Global Capability Centres (GCCs) dominated the market, taking a record 45% share of gross office leasing in H1 CY2026, up 22% year-on-year to 19.2 million sq ft, with Bengaluru alone accounting for 7.6 million sq ft, or 39%, of the national GCC total. Average office rents rose 9% YoY to ₹96 per sq ft per month, with south India absorbing 58% of national take-up. Net absorption of Grade A office space across the top seven cities came in at 27.4 million sq ft in H1 CY2026, up 2% year-on-year, well ahead of new completions of 22.2 million sq ft, which fell 10% YoY.
The REIT market has experienced explosive growth, with penetration of India's organised office stock rising from 11.2% in 2021 to 19.1% in the March quarter, according to Equirus Capital's REITs sector note. REIT market capitalisation has more than tripled since FY22, from ₹65,000 crore to ₹2,03,000 crore, while the unitholder base has grown nearly five times over to 3.7 lakh holders. The office stock held under REITs has increased 2.3 times to roughly 163 million sq ft, with six REITs now trading in India and Bengaluru dominating their combined portfolio, accounting for roughly ₹1.3 lakh crore, or 46%, of the sector's ₹2.8 lakh crore gross asset value. This momentum is attributed to leasing gains, rental growth and available developer-owned stock that together create "a window for accretive acquisitions and capital deployment."
The residential segment faced significant headwinds in Q1 FY27, with aggregate pre-sales of listed developers falling 26% YoY and 33% quarter-on-quarter to ₹36,600 crore, largely due to weak numbers from DLF and Prestige Estates, according to Equirus Securities' latest sector report. However, stripping out both developers, pre-sales actually grew 12% YoY, even though they were still down 31% sequentially. The bigger challenge was on the supply side, with developers launching just 38.1 million sq ft of new projects in the quarter, down 20% YoY, achieving only 17% of their revised full-year launch guidance of ₹2.6 lakh crore. Collection efficiency jumped significantly to 75% in the June quarter from 49% a year earlier and 65% in the March quarter, indicating improved construction progress and billing on already-sold inventory despite slower fresh bookings.
The value of QIPs and blocks continues to surpass IPOs as several companies tap the public markets through smaller issue sizes, with Mahesh Natarajan, Nomura's head of India equity capital markets (ECM), noting that "while IPO activity has picked up significantly in the last month, the story so far seems to indicate that public listings may not hit last year's record levels." However, he expects overall activity could approach 2025 levels with a high possibility that the product split across block deals, IPOs and QIPs may vary this year. These investors are increasingly leveraging secondary or block deals as an exit or monetization option compared to an OFS in the IPO as the company scales post-listing and commands a better valuation.
Between private and public markets, Nomura remains bullish around sectors such as financials, consumer, healthcare, enterprise tech, industrials and infrastructure, with Manish Agarwal noting that "we are increasingly seeing more instances of family-owned businesses looking to tap private capital before going to the public markets." The firm is also growing its presence in the new economy segment, focusing on established and fast-growing startups, with transactions including Wakefit's $170 million pre-IPO and IPO deal, Ather's $352 million IPO in 2025, and Kreditbee's $280 million private fundraise earlier this year. According to ICRA, residential property sales value in India's top seven cities is expected to grow 8-11% in 2026-27, driven by premiumisation and higher realisations, with sales value estimated to grow at a compound annual growth rate of 7-9% to ₹7.7-8.2 lakh crore between 2023-24 and 2026-27.
