Investors Bet Big on Office & Retail — What’s Driving India’s CRE Momentum

There’s a noticeable shift in how investors are approaching commercial real estate today. The focus is no longer on timing the market, but on building steady, income-generating portfolios. Office and retail spaces are regaining centre stage, backed by consistent leasing activity and improving consumption patterns. What stands out is the quality of capital coming in; more patient, more strategic, and far more aligned with long-term value. Investor confidence isn’t loud or speculative this time; it feels measured and deliberate.

As per industry data by Cushman & Wakefield, Delhi NCR registered gross leasing of 2.8 million square feet during Q1-26, recording a 36% quarter-over-quarter rise and a 2% year-on-year growth. Flex players took the lead in quarterly demand with 27%, while engineering & manufacturing and IT/BPM companies shared 21% and 20%, respectively. The gross leasing during the quarter was mainly driven by Gurugram with 60% share, followed by Noida with 37%.

Thus, the office spaces continue to hold their ground as the anchor of this momentum, offering a sense of stability that investors increasingly value. Demand remains steady, led in large part by the continued expansion of global capability centres, which are taking a long-term view on India. In terms of retail, Gurugram dominated the total retail lease transactions with 54%, followed by Delhi with 26%, and Noida with 20%. Out of the total leasing volume in the quarter, 64% was attributed to malls, whereas the balance of 36% went to main streets. Experience-led formats have certainly become the focus now, with F&B, entertainment, and lifestyles playing the key roles. Modern-day consumers are not only shopping for products anymore; they also want experiences. There seems to be a noticeable trend of premiumization as far as consumer behavior is concerned.

Pankaj Jain, Founder and CMD, SPJ Group, says, “Gurugram remains at the forefront, receiving increased recognition for its infrastructure-based development approach. While developments in prime locations continue to shape the retail landscape in the city, Old Gurgaon, on the other hand, offers a completely different edge – a proven ecosystem of high density and robust consumer base. Old Gurgaon has always had a certain advantage; it’s a lived-in market with real, everyday consumption. Unlike emerging corridors, the region has dense residential clusters, working professionals, and a diverse demographic profile that drives consistent footfall. That’s a strong foundation for retail to thrive. What’s interesting now is how investor perception is catching up to this reality. There’s growing appreciation for high-street formats in such locations, where visibility and accessibility directly translate into business performance.”

At the same time, there is also a clear preference for quality, with Grade A and ESG-aligned assets drawing stronger interest. What ties it all together is predictability; longer leases, stable yields, and assets well aligned with REIT frameworks are making office a dependable investment choice.

Ashwani Kumar, Pyramid Infratech, says, “Gurugram, particularly the Dwarka Expressway belt, is seeing a more decisive shift in investor thinking. The focus is moving beyond appreciation alone, with greater emphasis on assets that can deliver steady income. As residential density builds up along the corridor, it is naturally drawing attention for both office and high-street retail. Its planned layout works in its favour; there’s better clarity, stronger connectivity, and a more future-ready ecosystem. That reduces a lot of uncertainty for investors. We’re also seeing a more balanced mix of capital coming in, including domestic investors who are taking a long-term view on the opportunity.”

Paras Rai, Managing Director and Co-Founder, Property Master, adds, “Across NCR, the momentum we’re seeing in commercial real estate is both broad-based and more nuanced than before. In Gurugram, offices continue to attract institutional capital due to its stability and scale, especially with GCC-led leasing, while retail is drawing interest for its stronger yield play in high-footfall locations. What’s equally important is the rise of domestic capital; HNIs and family offices are far more active today, and they’re making informed, long-term bets. Investors are evaluating micro-markets closely, looking at catchment strength, tenant mix, and exit potential. It’s no longer a one-size-fits-all approach; it’s a far more calibrated investment strategy.”

As the market moves ahead, office and retail are being seen as complementary pieces of the same investment strategy rather than competing choices. Where one provides stability and visibility for a longer period of time, the other provides growth through consumption. Both these investments make up for a more diversified portfolio strategy. What is becoming increasingly evident is that commercial real estate is slowly but surely falling into line with the longer term, income-based view.