The Asset Relevance Crisis: Retrofitting India’s aging office stock for 2026

The Ticking Clock for Legacy Real Estate Assets

India’s office market currently stands at a critical juncture. While industry headlines celebrate record absorption figures in new Grade-A developments, a massive volume of existing stock - approximately 437 million square feet - is drifting rapidly towards operational irrelevance.

These assets, largely constructed over a decade ago, are now considered legacy inventory in a market that has undergone a fundamental transformation.

Landlords holding these properties face the very real danger of total vacancy, rather than just diminishing yields, as Global Capability Centres enforce strict ESG and technical compliance standards.

Consequently, buildings unable to meet these rigorous criteria are being systematically filtered out of the selection process before a site visit even occurs.

Moving Beyond Cosmetic Asset Enhancement

For years, the concept of asset enhancement in India was limited to superficial refreshes such as renovating lobbies, updating façades, or modernising lift interiors, but this approach is now insufficient.

Traditional cosmetic strategies fail to address the invisible yet critical infrastructure that modern occupiers demand. A pristine reception desk can no longer compensate for a building that fails basic air quality audits or lacks the capacity to support high-density digital operations.

The definition of prime real estate has shifted decisively away from simple location and aesthetics towards a new standard defined by performance, resilience, and technical fortitude.

Critical Technical Risks: Harmonics and air quality

Two technical factors have emerged as absolute dealbreakers for institutional tenants, forcing landlords to audit their core building systems.

Mitigating Electrical Harmonics and Power Distortion

The issue of electrical harmonics has become critical with the explosion of non-linear loads from servers, LED lighting, and variable frequency drives, as older power infrastructures are struggling to cope.

This high harmonic distortion creates electrical noise which not only damages sensitive IT equipment but also overheats neutral conductors, presenting an uninsurable operational risk for tech-heavy GCCs who demand clean, stable power.

Meeting Post-Pandemic Air Quality Standards

Air quality compliance has evolved from a discretionary wellness perk into a non-negotiable health standard, with global occupiers now deploying real-time sensors to monitor carbon dioxide (CO2), particulate matter (PM2.5), and volatile organic compounds (VOCs).

Older heating, ventilation, and air conditioning (HVAC) systems, originally designed for simple cooling rather than sophisticated filtration and fresh air exchange, frequently fail these rigorous audits instantly, rendering the asset unleasable to top-tier tenants who prioritise workforce health.

The Strategic Outlook: Bifurcation or upgrade?

The market is therefore bifurcating into two distinct categories: digitally resilient assets that integrate robust backbones with sustainable cores, and a growing graveyard of commodity spaces that, despite occupying prime locations, are becoming obsolete for credit tenants.

For landlords holding this vintage stock, the choice is binary and urgent: they must either commit to deep, structural capital expenditure to upgrade the central building systems or accept the inevitability of their property deteriorating into a discounted, secondary asset class.

---

Thank you to everyone who participated in the Bangalore Real Estate Roundtable 2026.