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India's Office Market to Lead Asia-Pacific with 7-10% Rental Surge in 2026

India's office market is projected to outperform the broader Asia-Pacific region in 2026, with prime office rents forecast to grow 7-10%. This growth is fueled by record-high leasing activity, particularly from Global Capability Centres (GCCs), flex operators, and IT firms. Bengaluru, Mumbai, and Delhi-NCR collectively saw about 50 million square feet of leasing in 2025, a 21% annual increase. Despite significant new supply expected across Asia-Pacific, India's strong market fundamentals are anticipated to absorb over 43 million square feet of completions without significantly weakening rental momentum.

Key Points: India Office Rents to Grow 7-10%, Outpacing Asia-Pacific

  • Record 50M sq ft leasing in 2025
  • Bengaluru leads with 13.8% rental growth
  • Driven by GCCs and flex operators
  • Strong fundamentals to absorb new supply
2 min read

India's office market likely to outpace Asia‑Pacific peers with 7-10 pc rental growth

Knight Frank report forecasts India's prime office rents will grow 7-10% in 2026, driven by record leasing and strong GCC demand.

"Global Capability Centres... are not only expanding but also committing early to high-quality developments. - Shishir Baijal"

New Delhi, Jan 24

India's office market is set to outperform the Asia‑Pacific region in 2026, with prime office rents forecast to grow 7-10 per cent, a report has said.

The report from real estate services firm Knight Frank stated that India has emerged as the region's growth engine, showing early signs of stabilisation after two years of rental declines.

The growth is supported by strong leasing momentum, the expansion of Global Capability Centres (GCC), and rising demand for high-quality and future-ready office space.

India's three largest office markets -- Bengaluru, Mumbai, and Delhi-NCR -- collectively recorded about 50 million sq ft of leasing in 2025, up 21 per cent year‑on‑year, with the highest annual absorption on record across these markets, the report said.

Bengaluru led regional performance with 13.8 per cent annual prime rental growth and a 7.4 per cent quarter‑on‑quarter rise in Q4 2025, with CY2025 marked as the city's most prolific year on record in terms of area leased.

Total leasing commitments across these three markets reached a record 50 million sq ft in 2025, driven by GCCs, flex operators, and IT outsourcing firms, and rents rose 5.8 per cent YoY, the report said.

Mumbai and Delhi‑NCR also saw steady rental appreciation in prime micro‑markets and rising interest from financial services, flex operators, and global corporates consolidating into higher‑quality locations.

Across Asia‑Pacific, over 100 million sq ft of new office space is expected in 2026, likely pushing regional vacancy and muting rental growth, while India's fundamentals should absorb over 43 million sq ft of completions in 2026 without materially weakening rental momentum, the firm forecasted.

Shishir Baijal, International Partner, Chairman and Managing Director, Knight Frank India, said occupier demand is expected to remain strong in 2026 with higher supply volumes supporting market traction during the year.

"Global Capability Centres, third-party IT businesses and financial services firms are not only expanding but also committing early to high-quality developments," said Baijal.

- IANS

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Reader Comments

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Priya S
Great for investors and developers, but I hope this rental growth is matched by salary growth for employees. In Mumbai and Delhi, commuting costs are already so high. If office rents shoot up 10%, will our companies provide better transport allowances or WFH options?
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Rohit P
The data is impressive, no doubt. 50 million sq ft! But as a respectful criticism, I wish reports like these also highlighted the pressure on infrastructure. Bengaluru's roads and metro can barely handle the current growth. Sustainable development needs to be part of the conversation.
M
Michael C
Working for a GCC in Hyderabad, I can confirm the demand for premium office space is real. Companies are competing for the best campuses to attract talent. It's a positive cycle – better offices lead to happier employees and more productivity.
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Shreya B
Hope this growth spreads to tier-2 cities as well. Places like Pune, Coimbatore, and Ahmedabad have great talent pools and can help decongest the big three. More distributed growth will be healthier for the country in the long run.
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Karthik V
"Future-ready office space" is the key phrase. It's not just about square footage anymore. After COVID, employees want hybrid work models, wellness facilities, and green buildings. Landlords who understand this will win big. Good to see the market evolving.

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