India’s real estate market is entering a phase where different segments are moving at distinctly different speeds.
While commercial real estate continues to benefit from corporate expansion, global capability centres (GCCs), flexible workspace adoption and logistics demand, the residential market is beginning to show signs of inventory accumulation. Data from Equirus’ Real Estate Tracker – Sept 2026 highlights this growing divergence across India’s property market.
The contrast is visible across office absorption, flexible workspaces and logistics on one side, and residential inventory and sales velocity on the other. The numbers suggest that the broader real estate cycle remains healthy, but the strength is no longer evenly distributed across asset classes.
Commercial Real Estate Continues to Gain Momentum
The office market remains one of the strongest components of India’s commercial real estate story.
Across the top seven cities, net office absorption reached 27.4 million sq ft during H1 2026, representing a 2% year-on-year increase. At the same time, new office completions declined by 10% to 22.2 million sq ft.
That combination has helped tighten market conditions. Office vacancy declined to a multi-year low of 15%, indicating that demand is continuing to absorb available space even as the pace of new supply moderates.
GCCs Remain a Major Office Demand Driver
Global capability centres are playing an increasingly significant role in this office market.
GCC leasing increased 22% year-on-year to 19.2 million sq ft, accounting for 45% of gross office leasing in H1 2026.
The continued expansion of GCC operations is important for commercial real estate because these occupiers typically require sizeable, high-quality office environments and can support sustained demand in established business districts as well as emerging office corridors.
Flexible Workspaces Are Moving Into the Mainstream
The flexible workspace segment is showing an even sharper rate of expansion.
Operators leased 191,306 seats in H1 2026, up 68.4% from the previous year. Flexible workspace accounted for approximately 20% of total office leasing, compared with 13% a year earlier.
The longer-term shift is equally notable. Flex transactions across eight major cities increased 8.4 times, rising from 2.2 million sq ft in 2017 to 18.6 million sq ft in 2025.
This suggests that flexible offices are increasingly becoming a structural part of India’s commercial real estate ecosystem rather than simply an alternative for short-term or temporary occupiers.
Logistics Real Estate Records Strong Growth
The logistics and industrial property segment is also maintaining strong momentum.
Leasing across the top eight cities reached a record 36.2 million sq ft in H1 2026, an 18% year-on-year increase. Warehousing represented the largest portion of this activity, contributing 24.3 million sq ft, or approximately 67% of total absorption.
Third-party logistics companies were another important source of demand. 3PL players leased 12.2 million sq ft, with their share increasing 64% year-on-year.
The numbers point towards continued demand for warehousing and distribution infrastructure as logistics networks expand and businesses reorganise their supply chains.
Residential Real Estate Faces a Different Equation
The residential market is presenting a more measured picture.
Across eight major markets, unsold residential inventory increased 4% year-on-year to 525,695 units by H1 2026.
The increase becomes more significant when viewed alongside the rise in quarters-to-sell. The metric moved to 6.0 quarters from 5.8 quarters at the end of 2025, indicating that the time required to clear existing housing inventory has lengthened.
This does not necessarily point to a broad-based downturn. Instead, it indicates that housing supply is beginning to run ahead of absorption in parts of the market, creating a more important inventory-management challenge for developers.
Ahmedabad and NCR Show Higher Inventory Overhang
Inventory pressure is not uniform across cities.
Ahmedabad recorded the highest inventory overhang at 8.1 quarters, followed by the National Capital Region at 7.6 quarters.
For developers and investors, quarters-to-sell is an important indicator because it provides a clearer picture of market velocity than inventory numbers alone. A larger inventory position becomes more consequential when the rate of absorption is unable to keep pace with new supply.
Luxury Housing Supply Continues Despite Inventory Concerns
Interestingly, the residential market’s inventory build-up has not stopped developers from planning sizeable premium and luxury housing launches.
According to the Equirus report, developers are preparing close to ₹1 lakh crore worth of luxury residential launches in Gurugram during H2 FY27.
This creates an interesting contrast within the housing market. While overall residential inventory is rising, developers continue to see an opportunity in the premium and luxury segment, particularly in high-value markets such as Gurugram.
The result could be a residential market that becomes increasingly segmented, with performance varying significantly according to location, price point, product quality and buyer profile.
REIT Market Expands as Institutional Real Estate Matures
The institutional side of India’s property market is also evolving.
The country’s listed REIT universe expanded from four trusts to six, signalling the continued development of listed real estate investment vehicles.
Listed REITs distributed ₹3,136 crore during Q1 FY27, more than twice the ₹1,559 crore distributed in the corresponding period a year earlier.
The expansion of the REIT ecosystem provides investors with greater access to income-generating commercial real estate while also creating another channel through which institutional capital can participate in the sector.
What the Two-Speed Market Means for Real Estate
The most important takeaway from the Equirus data is that India’s real estate market cannot be assessed through a single headline number.
Commercial assets are benefiting from several structural demand drivers at once. GCC expansion is supporting office leasing, flexible workspace operators are increasing their footprint, and logistics and warehousing demand remains strong.
Residential real estate, meanwhile, is moving through a different phase. Rising unsold inventory and a modest increase in quarters-to-sell suggest that developers may need to exercise greater discipline around launches, pricing and inventory management.
That does not make the residential market weak. It makes it more selective.
Commercial Strength, Residential Selectivity
India’s property market is therefore displaying two distinct trajectories.
Commercial real estate is being supported by corporate occupiers, GCC expansion, flexible working models and logistics requirements. Lower office vacancy and strong leasing volumes reinforce the strength of these segments.
Residential real estate, by comparison, is seeing inventory build-up even as developers continue to pursue large premium housing opportunities.
For investors and developers, this divergence makes asset selection increasingly important. The broader real estate cycle may remain constructive, but individual sectors and micro-markets are unlikely to deliver identical outcomes.
The current data points less towards a uniform property boom and more towards a market where commercial demand remains resilient while residential supply requires closer monitoring.
For the next phase of India’s real estate cycle, understanding where demand is coming from may matter just as much as understanding how much supply is being created.
