Bengaluru Leads APAC in Office Rent Growth as India’s Leasing Momentum Strengthens

India’s office market has started 2026 on a strong note, with Bengaluru emerging as the top performer across Asia-Pacific. According to Knight Frank’s latest research, the city recorded a 14 per cent year-on-year increase in prime office rents in Q1 2026—the highest among 24 major APAC markets.

This performance reflects sustained occupier demand, particularly from Global Capability Centres (GCCs), which continue to anchor leasing activity in India’s leading tech hub. Stable vacancy levels and a landlord-favourable market have further supported rental growth, reinforcing Bengaluru’s position as a global office destination.

India’s Key Cities Show Broad-Based Growth

While Bengaluru led the charts, other major markets such as Mumbai and Delhi-NCR also reported steady rental appreciation. Mumbai recorded a 7.5 per cent rise, while Delhi-NCR saw rents increase by 8.2 per cent year-on-year during the quarter.

Across the Asia-Pacific region, 18 out of 24 tracked cities reported rental growth, signalling a broader recovery in office markets despite ongoing geopolitical uncertainties. India and Australia played a key role in driving this momentum, with India standing out for its consistent occupier demand and expanding corporate footprint.

Leasing Momentum Remains Strong

Leasing activity across India’s top three office markets remained robust, with total transactions touching 18.8 million square feet in Q1 2026, marking a 3 per cent increase over the same period last year.

Mumbai stood out with a record 5.6 million square feet of leasing, highlighting a shift toward more geographically diversified demand. Unlike earlier cycles dominated by Bengaluru, leasing activity is now more evenly spread across major cities, reflecting a maturing, balanced market landscape.

Demand-Supply Gap Supports Rentals

A key factor driving rental growth is the widening gap between demand and new supply. Only 8.5 million square feet of office space was completed during the quarter—less than half of the total leasing activity.

This supply constraint, combined with strong occupier interest, has tightened vacancy levels and supported rental appreciation across prime assets. Occupiers are increasingly prioritising Grade A buildings with strong infrastructure, sustainability features, and flexible workspace integration.

GCCs and Flex Spaces Shape Demand

Global Capability Centres remain the primary demand driver, accounting for a significant share of leasing across markets. In Bengaluru alone, GCCs accounted for 41 per cent of total leasing activity, underscoring their growing influence.

At the same time, flexible workspace operators are becoming an integral part of corporate real estate strategies. Their ability to offer scalability and agility is attracting both multinational firms and domestic enterprises, further strengthening demand for premium office spaces.

Premium Assets Lead Market Preference

Leasing activity continues to concentrate in high-quality, prime office assets. This trend has deepened over recent years, supported by the need for better employee experience, sustainability compliance, and operational efficiency.

Delhi-NCR remains one of the most expensive office markets in the region, while Mumbai also ranks among the top, reflecting strong demand for premium locations. Bengaluru, though relatively more affordable, continues to attract global occupiers due to its strong talent ecosystem and tech-driven economy.

A More Mature Office Market

Industry experts believe that India’s office market is entering a more stable and diversified growth phase. As Knight Frank noted, “Leasing demand across India’s prime office markets has remained resilient, with activity becoming more broad-based across Bengaluru, Mumbai and Delhi-NCR.”

The shift toward diversified demand, combined with strong GCC expansion and limited supply, is expected to keep rental growth firm in the coming quarters. As occupiers continue to prioritise quality and flexibility, India’s office market is well-positioned for sustained long-term growth.