Flight to Quality: Why Indian Occupiers Are Upgrading Office Space

India’s office market is seeing a shift in what occupiers value. The focus is moving beyond how much space they lease to the quality of the space, where it is located and what it enables. According to CBRE’s 2026 India Office Occupier Survey, 55% of occupiers considering relocation are targeting higher-quality buildings to improve employee experience and support future growth.

Leasing activity reflects this preference. During 2025–H1 2026, 61% of office leasing in India took place in core micro-markets, while 41% took place in investment-grade assets.

For corporate real estate leaders, this means that decisions around relocation, renewal and expansion increasingly extend beyond rent. Commute access, talent reach, asset quality, employee experience, technology and ESG credentials are becoming important considerations in evaluating office space.

What Is Driving India’s Flight to Quality?

Several factors are shaping occupier decisions.

• Location and connectivity. 70% of occupiers rank commute and connectivity among their top three criteria when selecting office space, while 47% prefer core or established micro-markets.
• Talent accessibility. 56% rank talent accessibility among their top three site selection criteria, reflecting the importance of location in attracting and retaining employees.
• Building quality and workplace experience. 35% rank asset quality and workplace experience among their top three criteria when selecting office space within a city.
• Sustainability. 52% have defined ESG goals for their real estate portfolios, making sustainability an increasingly important consideration in workplace decisions.
• Technology and flexibility. 38% identify smart building systems among the workplace features that would matter most in an AI-driven future of work, while 67% expect flexible space to form part of their portfolio within two years.

Quality is also becoming part of broader portfolio strategy. Occupiers planning expansion are considering how new space can improve workplace quality, while those approaching renewals are balancing business continuity with the need to secure well-located, high-quality space.

AI adoption has not weakened this focus. 57% of occupiers report no measurable impact from AI on leasing so far. As AI changes how workplaces are used, the emphasis remains on offices that can support collaboration, employee experience, talent attraction and evolving technology requirements.

What Is Driving Demand for Higher-Quality Office Space?

The office’s role after hybrid work

Hybrid work has changed what employees expect from the office. 77% of surveyed occupiers report office utilisation above 50%, while investment priorities increasingly centre on spaces that support collaboration, focused work and employee experience.

Occupiers plan to increase investment in:

• Enclosed or soundproof spaces for video calls: 52%
• WorkTech such as booking apps and sensors: 50%
• Collaborative spaces for unscheduled catch-ups: 48%
• Meeting rooms for up to five people: 47%

Accommodating hybrid work remains a key workplace experience focus for 50% of occupiers.

The implication is clear. The office increasingly needs to provide an experience that is difficult to replicate remotely, with spaces designed around collaboration, interaction and flexibility.

Talent and connectivity

Commute and connectivity, at 70%, and talent accessibility, at 56%, are the two most-cited site selection criteria. The importance of connectivity is also reflected in the operational risks occupiers identify. 95% view traffic congestion and commute as a threat to operations and employee experience, while 66% cite public transit access and last-mile connectivity as infrastructure concerns.

For occupiers, location therefore extends beyond the address. It encompasses how easily employees can reach the workplace and how effectively the location connects businesses to their talent pools.

Sustainability as a baseline

52% of occupiers have defined ESG goals for their real estate portfolios. Among large-sized companies, this rises to 82%. As these commitments become more embedded in corporate real estate strategies, green certification and sustainable building features are increasingly being evaluated as baseline considerations rather than optional enhancements.

CBRE’s sustainability advisory supports organisations in achieving green building certifications including LEED, IGBC and GRIHA.

Building services and technology

Occupiers are also expecting greater support from developers and landlords.

75% want developer support on safety and security infrastructure, while 69% expect support for app-based service experiences.

For an AI-driven future of work, smart building systems are becoming particularly relevant. 38% identify features such as sensor-driven utilisation and predictive maintenance among those that would matter most, making smart building systems the highest-ranked feature in this category.

The quality of an office building is therefore increasingly shaped by what happens beyond its physical design. Technology, services, safety and infrastructure all contribute to the workplace experience.

How Leasing Data Reveals the Flight to Quality

Source: CBRE’s 2026 India Office Occupier Survey

What the numbers signal

Occupier preferences and market activity point in the same direction. 47% of occupiers prefer core or established micro-markets, while a significant share of leasing activity is concentrated in these locations.

Investment-grade assets also account for a substantial share of leasing activity within core micro-markets, indicating the importance of asset quality alongside location.

New supply is following a similar direction, with investment-grade assets accounting for 57% of new office completions.

Together, these indicators point to a market where occupiers are increasingly seeking a combination of accessibility, quality and future-readiness.

Why Location Still Matters

Core micro-markets remain the first choice

When considering new office locations:

• Core or established micro-markets: 47%
• Combination of core and non-core: 25%
• Non-core or emerging micro-markets: 8%
• No clear preference or depends on requirements: 20%

The preference for established locations is particularly strong among GCCs. 58% of GCC respondents prefer core micro-markets, compared with 36% of non-GCC occupiers.

For GCCs in particular, CBRE notes that commute optimisation and ready infrastructure are important levers for attracting and retaining talent.

Availability is a concern

40% of occupiers are concerned about the availability of high-quality, well-located space through 2028. This includes 29% who are specifically concerned about space that is both high-quality and well-located.

For occupiers evaluating relocation or expansion, this makes early planning increasingly important. Understanding the availability of suitable assets before requirements become urgent can give businesses greater choice.

Transit access can influence relocation decisions

Public transport access is among the most important factors affecting an occupier’s response to an asset. 38% would exit, reject or seek a discount on a building without public transport access.

The finding reinforces the importance of connectivity in the flight to quality. A high-quality building that is difficult to reach may not deliver the workplace experience or talent access that occupiers require.

Infrastructure is reshaping micro-markets

Infrastructure investment is also influencing the outlook for established and emerging business districts.

CBRE Research maps upcoming metro, road and airport projects across Bengaluru, Mumbai, Delhi-NCR, Hyderabad, Pune, Chennai and Kolkata. Commercial districts expected to benefit include Outer Ring Road in Bengaluru, BKC and Powai in Mumbai, and Financial District in Hyderabad.

For occupiers, planned infrastructure can be an important consideration when evaluating the long-term potential of a location.

What Do Occupiers Look for in a High-Quality Office?

A high-quality office is no longer defined by the building alone. Occupiers are evaluating the wider experience an asset can provide.

These priorities show that quality is increasingly multidimensional. Location, accessibility, workplace experience, sustainability, technology and building services all contribute to how occupiers assess an asset.

How Should Occupiers Evaluate a Quality Office Relocation?

A relocation decision should look beyond headline rent and assess how well the asset supports the organisation’s wider requirements.

1. Location
Is the asset in a core or established micro-market, or in a location supported by planned infrastructure?

2. Building quality
Does the asset meet current expectations for workplace experience, safety systems, certifications and integrated campus features?

3. Accessibility
Does the building offer reliable public transport access and last-mile connectivity? This is one of the factors most likely to influence an occupier’s decision to remain in or reject an asset.

4. Rental economics
Assess rent and escalation alongside lease terms, commute, asset quality and the overall employee experience. 30% of occupiers rank existing rentals and escalation among their top three criteria, compared with 70% for commute and connectivity.

5. Employee experience
Does the building support collaboration, hybrid work, wellbeing and organisational identity? 65% of occupiers cite identity and culture through design as a focus area.

6. Sustainability
Does the asset align with the organisation’s ESG goals and certification requirements?

7. Technology and infrastructure
Are smart building systems, app-based services and reliable building infrastructure in place?

8. Flexibility
Can flexible space complement the core lease and provide additional agility? 67% of occupiers expect flexible space to be part of their portfolio within two years.

9. Long-term scalability
Can the location and asset support future growth? 77% of occupiers expect their India office portfolio to grow over the next two years.

The distinction between rent and overall value is becoming increasingly important. Occupiers are assessing what an asset delivers in terms of access, talent reach, employee experience, technology and long-term flexibility alongside its rental economics.

What the Flight to Quality Means for India’s Office Market

The shift towards higher-quality office space has implications across the real estate ecosystem.

For occupiers

Occupiers should plan relocations and expansion requirements well in advance, particularly as the availability of high-quality space in established locations remains constrained.

Flexible workspace can also provide a structural lever for speed-to-market and portfolio agility, allowing organisations to respond to changing requirements without relying entirely on conventional leases.

For landlords and developers

The opportunity lies in creating assets that respond to what occupiers increasingly value.

This includes:

• Prioritising commute access and transit connectivity in site selection
• Designing AI-ready buildings with smart systems and reconfigurable spaces
• Investing in workplace experience and employee-focused amenities
• Developing quality office space in select Tier-II cities
• Partnering with occupiers on areas such as safety, security and employee experience

75% of occupiers want developer support on safety and security infrastructure, while 61% expect developers to partner with them on improving employee experience.

For investors

For investors, the flight to quality creates an opportunity to upgrade ageing assets and bring them in line with changing occupier expectations.

CBRE’s perspectives also point to green certification becoming increasingly standard, while commute access and asset experience can provide stronger opportunities for differentiation.

Retrofitting is gaining attention too. 36% of occupiers are considering upgrading older offices for energy efficiency, signalling the growing importance of improving existing stock alongside developing new assets.

FAQs

What does flight to quality mean in commercial real estate?

Flight to quality refers to the movement of occupiers towards higher-quality office buildings and locations. In CBRE’s 2026 India Office Occupier Survey, 55% of occupiers considering relocation are targeting better-quality buildings to improve employee experience and support future growth.

Why are companies moving to higher-quality offices in India?

Companies are increasingly evaluating office space through a broader set of criteria, including commute and connectivity, talent accessibility, asset quality, workplace experience, sustainability and technology. Commute and connectivity rank highest at 70%, followed by talent accessibility at 56% and asset quality and workplace experience at 35%.

How does location influence office relocation decisions?

Location is central to the relocation decision. 70% of occupiers rank commute and connectivity among their top three criteria, while 47% prefer core or established micro-markets. GCCs show an even stronger preference for core locations, at 58%.

Are occupiers willing to pay a premium for quality features?

The survey indicates that sustainability is increasingly viewed as a baseline requirement rather than a feature that necessarily commands a rental premium. Public transport access stands out, with 18% of occupiers willing to pay a premium for it.

What share of India’s office leasing is in investment-grade assets?

During 2025–H1 2026, 41% of all office leasing in India took place in investment-grade assets. Within core micro-markets, 46% of leasing transactions were in investment-grade buildings.

The Takeaway for Corporate Real Estate Leaders

India’s flight to quality is increasingly visible in both occupier strategy and market activity. For corporate real estate leaders, the question is no longer simply how much space is required, but which assets can support business growth, talent access and workplace expectations over the long term.

Before committing to a relocation, renewal or consolidation, occupiers should ask:

Quality: Does the asset meet current standards for safety, technology and workplace experience?
Location: Is it in a well-connected micro-market with reliable public transport access?
Employee experience: Does it support collaboration, hybrid work and the workplace identity teams expect?
Portfolio efficiency: Can the move support current requirements while creating room for future growth?
Timing: Given constrained availability of high-quality, well-located space, how much lead time is required to secure the right option?

With demand for high-quality space in established locations remaining strong, early planning can give occupiers greater choice.

Planning a relocation, renewal or consolidation? CBRE’s transaction advisors and workplace strategists work with occupiers across India to evaluate locations, assess asset quality and identify space that meets long-term portfolio requirements. Connect with CBRE.