India’s office market faces widening funding gap as deployable capital trails demand - The Economic Times

Mumbai: India’s commercial real estate sector is facing a growing mismatch between the scale of occupier demand and the amount of deployable institutional capital available to fund future development, raising concerns over supply creation across office and warehousing assets.

While leasing activity across major cities continues to remain strong, the limited availability of investment capital is increasingly emerging as a structural bottleneck for the sector’s next growth cycle.

The gap is particularly stark in the office market, where around $2.3 billion of deployable capital currently available as dry powder can support only nearly 12.2 million sq ft of fresh office development, enough to address just about 14% of India’s annual office demand of 86.4 million sq ft recorded in 2025, showed a Knight Frank India assessment.