Delhi NCR ranks India’s most expensive office market and 6th in Asia-Pacific, with rents at ₹340/sqft/month. Mumbai follows at 8th with ₹317/sqft, while Bengaluru ranks 18th as a cost-effective option. Knight Frank highlights stable rents, strong global demand, and record transaction volumes driving India’s thriving office market.
Delhi NCR has emerged as the most expensive office market in India and the sixth costliest in the Asia-Pacific (APAC) region, according to Knight Frank’s Q3 2024 Asia-Pacific Prime Office Rental Index. Mumbai also ranks prominently, taking the eighth spot, while Bengaluru is a more affordable option, sitting at 18th on the list.
Delhi NCR and Mumbai Lead in Prime Office Rents
Delhi NCR recorded a prime office rental value of ₹340 per square foot per month, maintaining its position as a leading market in APAC. Rental prices have remained steady over the past year, signalling the city’s strong commercial real estate sector position.
“The prime office market of Delhi NCR continues to see rental values maintain levels seen in the past four quarters,” the report noted, emphasising the region’s resilience and consistent demand.
Mumbai follows closely, with prime office rents at ₹317 per square foot monthly, placing it eighth among APAC’s most expensive commercial hubs. These two cities remain the only Indian markets in the top 10 rankings.
Bengaluru Offers Cost-Effective Alternatives
Bengaluru, India’s tech hub, ranked 18th in the APAC region with prime office rents at ₹138 per square foot per month. Despite being significantly more affordable than Delhi NCR and Mumbai, the city continues to attract corporate interest, with stable rents expected in the coming year.
“The resilience of the Indian economy continues to attract strong global corporate interest, as reflected in the sustained demand across India’s major office markets,” said Shishir Baijal, Chairman and Managing Director of Knight Frank India.
Indian Office Market Thrives Amid Stability
India’s major office markets benefit from strong economic performance, sustained demand, and stable rental values. Baijal added that “quarterly transaction volumes have reached record highs and are likely to exceed annual benchmarks in 2024,” underlining the sector’s robust growth.
Since 2022, rental rates have remained stable, supported by consistent physical occupancy levels and rising demand. These factors drive confidence in the Indian office market’s sustained strength in the medium term.
APAC Market Trends: Tenant-Focused Outlook
Globally, the APAC prime office sector remains tenant-favorable, with supply expected to drop by nearly 20% by 2025. However, increasing leasing activity could tighten availability, reinforcing the trend of tenants seeking high-quality spaces to meet evolving workspace needs.
“An increase in leasing activity could quickly tighten the availability of prime spaces,” the report highlighted, noting a continued “flight-to-quality” trend among tenants.
Regional Comparisons and Outlook
Other cities in the index, such as Singapore, Tokyo, and Sydney, also ranked high, showcasing the competitive nature of the APAC prime office market. Despite the global challenges, Indian cities continue to attract multinational corporations, leveraging stable rents and a growing demand for premium office spaces.
As India solidifies its position in the global office market, Delhi NCR and Mumbai set benchmarks in pricing. At the same time, Bengaluru offers a cost-effective alternative, reflecting the diversity and strength of the country’s commercial real estate landscape.
