PropTech and AI are Redefining India’s Grade?A Offices

India’s office market is undergoing a quiet but consequential shift. For decades, commercial real estate has been defined by familiar markers: location, floor plate size, rental value, and occupancy. But a new research report by Cushman & Wakefield suggests that the next phase of growth will be shaped less by square footage and more by how intelligently buildings are planned, delivered, and operated.

Titled From Square Footage to Smart Footage: How PropTech Will Power the New Office Paradigm, the report examines how property technology, or PropTech, is beginning to reshape India’s commercial office sector. The findings point to a sector moving away from selective digitisation toward digitally native, performance-driven workspaces that respond to rising cost pressures, occupier expectations, and regulatory demands.

PropTech, as defined in the report, is a broad umbrella. It spans traditional applications such as leasing platforms, facility management systems, and occupier experience tools, alongside construction technology, or ConTech, which covers planning, design, and execution. Together, these solutions aim to embed technology across the entire building lifecycle, from concept to operation.

The analysis draws on a detailed mapping of more than 2,200 active PropTech firms operating across commercial and mixed-use assets in India, combined with insights from 20 senior leaders representing developers, asset managers, workspace operators, facility managers, and PropTech companies. Their collective input highlights a growing consensus: technology is no longer optional for Grade-A offices. It is becoming central to how quality, efficiency, and value are defined.

Despite India’s advances in digital infrastructure across sectors, real estate remains a laggard in technology adoption. Globally, the sector ranks in the bottom quartile on AI readiness indicators, constrained by fragmented systems, limited integration across the building lifecycle, and low enterprise-wide deployment. In India, the contrast is particularly stark when compared to sectors such as banking, financial services, IT, and IT-enabled services, where digital adoption exceeds 50%. Real estate, by comparison, is still at an early stage of digitisation.

That gap is becoming harder to justify as economic pressures mount. Construction costs in India continue to rise steadily. Raw materials, which account for nearly 60% of construction expenses, have increased at an average rate of around 10% annually since FY21. Labour costs have grown by roughly 8% per year. Productivity benchmarks further reveal that similar construction work in India often requires more than twice the labour effort seen in developed markets.

These pressures are compressing margins and increasing delivery risks for developers and owners. As a result, the report notes a growing push toward technologies that improve predictability, reduce rework, and strengthen cost control. Tools such as digital project management platforms, building information modelling (BIM), and data-led procurement systems are increasingly seen as essential rather than experimental.

The PropTech ecosystem itself is expanding rapidly. The report identifies more than 2,200 active firms operating across different stages of the building lifecycle. Adoption so far has been strongest in downstream functions such as leasing, asset operations, and facilities management, where technology has delivered tangible gains in transparency, tenant engagement, and operational efficiency.

However, upstream stages like planning and design continue to lag. This is a critical gap, the report argues, since late-stage design changes are frequently cited by industry leaders as a major cause of project delays and cost overruns. Greater use of integrated digital tools earlier in the lifecycle could deliver disproportionate value by reducing uncertainty before construction begins.

One of the report’s central themes is the changing definition of Grade-A office space. Certifications that were once considered differentiators are now becoming baseline expectations. Green building certifications, wellness standards such as WELL, and digital connectivity ratings like WiredScore are increasingly seen as table stakes.

As of the first half of 2025, around 52% of India’s office stock is green-certified. These buildings command rental premiums of roughly 11% and achieve up to 5% higher occupancy compared to non-certified assets. Institutional ownership has reinforced this shift, with nearly 90% of REIT-owned office portfolios now green-certified. The report underscores that such certifications are increasingly enabled by PropTech, through integrated BIM systems, IoT-based monitoring, and real-time data dashboards that allow performance to be tracked and reported consistently.

Occupier behaviour is further accelerating this transition. Global Capability Centres, or GCCs, are playing a particularly influential role. Functions related to artificial intelligence, data analytics, and cloud computing already form a significant share of GCC operations today, with that share expected to nearly double by 2030.

As a result, occupiers are prioritising compliance-ready, digitally enabled workplaces that allow faster occupation and measurable performance from day one. Assets lacking adequate digital infrastructure are increasingly being filtered out early in leasing discussions, raising the bar for landlords and developers alike.

The report also points to a significant opportunity within India’s build-to-suit office segment. It estimates that the top 10 occupiers alone account for approximately 73 million square feet of build-to-suit campuses, representing an asset value of around USD 11 billion. Traditionally bespoke and outside the institutional leasing framework, these assets could be standardised and institutionalised through PropTech, expanding investible Grade-A inventory and improving performance oversight.

Yet, challenges remain. While PropTech solutions are widely available, scaling adoption across portfolios is still difficult. Industry feedback highlights three persistent barriers: difficulty in clearly demonstrating return on investment, integration challenges with legacy systems, and a fragmented vendor landscape that limits interoperability.

Artificial intelligence is positioned as a critical enabler in overcoming these hurdles. By connecting siloed systems, automating decision-making, and enabling performance measurement at a portfolio level rather than building by building, AI could help real estate move from isolated pilots to enterprise-wide transformation.

Commenting on the findings, Anshul Jain, Chief Executive – India, Southeast Asia, Middle East, Africa and Asia-Pacific Office & Retail at Cushman & Wakefield, said expectations around efficiency, transparency, and performance are rising sharply. As businesses adopt digital and AI-led functions, buildings are increasingly expected to operate with similar levels of predictability and accountability.

According to Jain, PropTech offers a practical pathway to address long-standing inefficiencies in delivery and operations while strengthening sustainability outcomes through smarter energy management, real-time monitoring, and more credible ESG reporting. As standards tighten and portfolios scale, technology will move from supporting individual use cases to underpinning how commercial real estate is planned, delivered, and managed.

In India’s evolving office market, the report suggests, smart footage may soon matter as much as square footage itself.