While office markets across APAC are showing early signs of stabilisation after nearly two years of rental declines, India stands out as the region’s key growth engine. Prime office rents in major Indian cities are forecast to rise 7–10% year-on-year in 2026, significantly outperforming most regional peers.

Record Leasing Activity Across India’s Top Office Markets

India’s three largest office markets—Bengaluru, Mumbai, and Delhi-NCR—together recorded nearly 50 million sq ft of leasing in 2025, marking a 21% year-on-year increase and the highest annual absorption ever across these cities.

• Bengaluru led the region, registering 13.8% annual prime rental growth in 2025
• Prime rents in Bengaluru rose 7.4% quarter-on-quarter in Q4 2025, the strongest among all tracked APAC cities
• Mumbai and Delhi-NCR posted their second-highest leasing levels, just behind 2024

Beyond GCCs, leasing demand was supported by flex office operators, IT outsourcing firms, and financial services companies, resulting in 5.8% year-on-year rental growth across key Indian markets in 2025.

India Defies Regional Supply Pressures

Across the Asia-Pacific region, over 100 million sq ft of new office supply is expected to come online in 2026, potentially pushing vacancy levels higher and limiting rental upside in several markets.

In contrast, India is expected to add around 43 million sq ft of fresh office supply in 2026, a volume that Knight Frank believes can be absorbed without materially weakening rental momentum.

A pronounced flight-to-quality trend is further strengthening India’s office fundamentals, with occupiers increasingly favouring:

• ESG-compliant buildings
• Flexible and future-ready office layouts
• Prime locations that support talent attraction and productivity

India’s Office Market Enters a Structurally Strong Phase

Commenting on the outlook, Shishir Baijal, International Partner, Chairman and Managing Director, Knight Frank India, said:

“India’s office market has decisively moved into a phase of structurally stronger demand with gross absorption surpassing last year’s peak by 20%, closing at 86.4 million sq ft for the top eight cities. Global Capability Centres, third-party IT businesses and financial services firms are not only expanding but also committing early to high-quality developments. This confidence reflects India’s growing role in global business ecosystems.”

He added that strong occupier demand in 2026, coupled with higher supply volumes, will continue to support market traction, making India one of the most compelling office markets globally for both occupiers and investors.

Medium-Term Outlook Remains Positive

Knight Frank notes that office supply across Asia-Pacific is expected to decline sharply from 2027 onwards, tightening the availability of quality spaces. Against this backdrop, India’s current cycle of strong pre-leasing activity, improving asset quality, and sustained occupier confidence positions it favourably for medium-term rental growth and capital value appreciation.

Tim Armstrong, Global Head of Occupier Strategy and Solutions, Knight Frank, said:

“While the region’s growth fundamentals remain strong, trade policy shifts will continue to create uncertainty in 2026. Rising costs and rapid technological change are pushing companies to rethink their real estate strategies. Securing adaptable, high-quality office space with a long-term view will be critical as occupiers balance cost optimisation with future growth.”

Key Highlights at a Glance

• India to lead APAC office growth in 2026
• Prime rents in India to rise 7–10% YoY
• 43 million sq ft of new office supply expected in 2026
• 50 million sq ft leased across Bengaluru, Mumbai & NCR in 2025
• GCCs remain the primary demand driver

Also Read: More Global Offices, More Jobs, More Homes: How GCC Expansion Will Shape India’s Housing Market

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