India’s office market is emerging as a rare bright spot in the Asia-Pacific region, even as several global cities continue to grapple with the after-effects of two years of rental decline. According to Knight Frank’s Asia-Pacific Office Highlights Q4 2025, India is expected to lead the region in 2026, with prime office rents forecast to rise by 7–10%, well ahead of most regional peers. Strong leasing momentum, the continued expansion of Global Capability Centres (GCCs), and a growing preference for high-quality, future-ready workplaces are driving this outperformance.
While Asia-Pacific office markets are beginning to stabilise, India has clearly pulled ahead. Demand across its major cities remains robust, supported by global corporates consolidating operations and committing early to premium office developments. This momentum is translating into healthy rental growth and sustained investor interest, positioning India as the growth engine of the region.
Leasing activity in 2025 reached record levels across India’s three largest office markets—Bengaluru, Mumbai and Delhi-NCR. Together, these cities recorded nearly 50 million sq ft of office leasing, a 21% year-on-year increase and the highest annual absorption ever seen across these markets. Bengaluru stood out, registering the strongest rental growth among all Asia-Pacific cities tracked by Knight Frank. Prime office rents in the city grew 13.8% over the year, with a sharp 7.4% quarter-on-quarter rise in Q4 2025 alone.
For Bengaluru, 2025 marked its most prolific year on record in terms of space leased. Mumbai and Delhi-NCR also delivered strong performances, with annual leasing activity second only to the highs of 2024. Demand was led not only by GCCs but also by flex office operators, third-party IT firms and financial services companies. This broad-based demand helped push average rents across the three cities up by 5.8% year-on-year in 2025.
Mumbai and Delhi-NCR, in particular, saw steady rental appreciation in prime micro-markets, driven by global occupiers seeking to consolidate into fewer, higher-quality locations. As companies reassess their real estate strategies, the focus has shifted from scale to efficiency, quality and long-term flexibility.
India’s performance stands in sharp contrast to the wider Asia-Pacific region, where more than 100 million sq ft of new office supply is expected to come online in 2026. This influx is likely to push vacancy levels higher and temper rental growth across many regional markets. India, however, appears well placed to absorb new supply. With over 43 million sq ft of completions expected in 2026, strong occupier demand is expected to prevent any meaningful weakening of rental momentum.
A key theme shaping occupier decisions is the “flight to quality.” Across Asia-Pacific, companies are prioritising ESG-compliant buildings, flexible layouts and locations that support talent attraction and productivity. In India, this trend is particularly pronounced, with occupiers showing a clear preference for future-ready assets that can adapt to evolving workplace needs.
Shishir Baijal, Chairman and Managing Director of Knight Frank India, notes that the market has entered a phase of structurally stronger demand. Gross absorption across India’s top eight cities surpassed last year’s peak by 20%, closing at 86.4 million sq ft. According to him, GCCs, IT services firms and financial institutions are not only expanding but committing early to high-quality developments, reflecting India’s growing importance in global business ecosystems.
Looking ahead, the outlook remains positive. Asia-Pacific office supply is expected to decline sharply from 2027 onwards, which could tighten markets and support rental growth. India’s current cycle of strong pre-leasing, improving asset quality and sustained occupier confidence positions it favourably for medium-term rental growth and capital value appreciation, even as other regional markets contend with oversupply and softer demand.
Tim Armstrong, Global Head of Occupier Strategy and Solutions at Knight Frank, points out that while economic and policy uncertainty will persist in 2026, companies are increasingly taking a long-term view on real estate. Rising costs and rapid technological change are pushing occupiers to secure adaptable, high-quality spaces that can support both current operations and future growth. In this environment, India’s office market continues to stand out as one of the most compelling globally.
