Prime Office Rents Rise Across India’s Gateway Markets; Bengaluru Among APAC’s Top Performers: Knight Frank APAC Prime Office Rental Index

Bengaluru records highest rental growth at 10.7% YoY among Indian office markets

• Flex operators account for over 30% of leasing across Bengaluru, Delhi-NCR, Mumbai
• Prime office vacancies remain stable despite over 7 mn sq ft new completions

Mumbai, August 17, 2026: Knight Frank, in its latest edition of the Asia-Pacific Office Highlights – Q2 2026, reported that India’s leading office markets continued to record healthy occupier demand in Q2 2026, with Bengaluru, Mumbai and Delhi-NCR collectively leasing 9.8 mn sq ft of office space. While leasing moderated from the exceptionally high levels seen in 2025, demand remained robust, supported by stable vacancy levels despite more than 7 mn sq ft of new office completions during the quarter.

Prime office rents continued to strengthen across India’s largest office markets. Bengaluru recorded the strongest rental growth among Indian cities at 10.7% YoY, followed by Delhi-NCR at 7.6% and Mumbai at 4.0%. Global Capability Centres (GCCs) continued to anchor occupier demand across India’s gateway office markets. In addition, flex space operators accounted for over 30% of leasing volumes across Bengaluru, Delhi-NCR and Mumbai, overtaking financial services as one of the largest occupier groups. The increasing adoption of flexible workplace strategies by large occupiers reflects a structural shift in portfolio planning as organisations seek greater agility while navigating evolving workplace requirements.

Occupancy Cost (USD/sq ft/year)

Source: Knight Frank Research

Across the Asia-Pacific region, prime office rents increased 0.6% QoQ during Q2 2026, with 19 of the 24 tracked cities recording stable or increasing rental levels. Bengaluru, Hong Kong SAR and Tokyo led annual rental growth across the region, while technology and AI-related occupier companies continued to generate demand for premium office space.

Shishir Baijal, International Partner, Chairman and Managing Director, Knight Frank India, said, “India’s office market continues to demonstrate remarkable depth and resilience. Demand remains healthy despite the elevated leasing base established last year, reflecting the country’s enduring appeal as a global business destination. Stable vacancy levels alongside rental growth indicate a market that continues to absorb new supply efficiently. The continued expansion of Global Capability Centres and the increasing participation of flexible workspace operators reflect structural changes in occupier strategies rather than cyclical shifts. While organisations continue to adapt to AI adoption and evolving macroeconomic conditions, India’s talent advantage, business ecosystem and strategic role in global corporate operations continue to underpin long-term office demand.”

ASIA PACIFIC PRIME OFFICE RENTS- Rental Appreciation (YoY%)

Source: Knight Frank Research

Delhi-NCR

The prime office market in Delhi-NCR continued to witness healthy rental growth, with prime office rents increasing 7.6% YoY in Q2 2026. The city recorded a prime office rent of INR 369/sq ft/month, making it the sixth most expensive office market in the Asia-Pacific region. In Q2 2025, Prime rents rose by 0.9% YoY to INR 343 per sq ft per month. Rental values are expected to remain stable over the next 12 months, supported by continued demand from Global Capability Centres (GCCs), India-focused occupiers and flexible workspace operators.

Mumbai

Mumbai’s prime office market maintained its upward trajectory in Q2 2026, with prime office rents rising 4.0% YoY. The city recorded a prime office rent of INR 335/sq ft/month, making it the eighth most expensive commercial office market in the Asia-Pacific region. In Q2 2025, MMR recorded a 7% YoY rise in prime rents, reaching INR 323 per sq ft per month. Rental values are expected to remain on an upward trajectory over the next 12 months, supported by continued demand from financial services firms, Global Capability Centres (GCCs) and flexible workspace operators.

Bengaluru

Bengaluru remained India’s best-performing office market and one of the strongest performers across the Asia-Pacific region, recording 10.7% YoY rental growth. Prime office rents in Bengaluru reached INR 163/sq ft/month. In Q2 2025, prime rents of Bengaluru’s office market grew 7.9% YoY to INR 148 per sq ft per month.

“Occupiers are entering a new phase of decision-making as tightening supply makes securing the right space in the right location increasingly challenging. As development pipelines moderate and demand expands beyond traditional sectors into rapidly growing AI and innovation ecosystems, competition for high-quality space will only intensify across Asia-Pacific. With future supply becoming more uneven, organisations are extending their planning horizons and evaluating real estate requirements earlier, particularly where options for large-scale expansion may be limited.”

“We are also seeing a greater emphasis on strategic flexibility through expansion options, phased commitments and pre-leasing arrangements. Increasingly, securing future expansion capacity in the next few years will become a critical competitive advantage.” says Tim Armstrong, Global Head of Occupier Strategies and Solutions, Knight Frank.

Geopolitical developments and AI-led workplace transformation may influence occupier decisions in the near term. However, India’s long-term office growth story remains firmly underpinned by its deep talent pool, competitive operating environment and strategic role in global corporate expansion.

As occupiers continue to optimise their real estate portfolios, the flight-to-quality trend is expected to remain a defining characteristic of India’s office market. Buildings offering superior sustainability credentials, modern amenities and flexible workplace solutions are likely to continue outperforming the broader market, reinforcing India’s position as one of the most attractive office investment and occupier destinations in the Asia-Pacific region.