India's Office Boom: Record Leasing Defies Asia's Real Estate Slowdown

Full-year leasing volumes of Bengaluru, NCR and Mumbai together are expected to touch 50 million sq ft, surpassing the previous record of 41 million sq ft set in 2024, the report from real estate services firm Knight Frank said.

This increase in leasing has driven prime rents higher, increasing 4.3 per cent YoY across major cities, despite the arrival of new supply, it noted.

"Despite a supply influx of nearly 9 mn square feet during the quarter, prime office rents across India’s three largest office markets – Bengaluru, NCR, and Mumbai – rose an average of 4.3 per cent YoY, highlighting the market’s enduring strength," the report said.

Across the APAC region, prime office rents fell 1.4 per cent YoY, with rental growth flatlining at 0.0 per cent QoQ, down from 0.2 per cent in Q2 2025.

The surge in leasing volumes in India was also driven by commitments from global capability centres and a revival in third-party IT services.

Bengaluru led in performance, with prime rents increasing 8.8 per cent year-over-year and 2 per cent quarter-over-quarter, driven by demand in areas like Outer Ring Road and Whitefield. Delhi-NCR and Mumbai posted 2 per cent QoQ growth, with YoY increases of 3 per cent and 3.9 per cent, respectively.

In comparison, several Asia-Pacific markets saw muted rental growth as landlords prioritised occupancy amid elevated vacancies. India’s strong performance reflects a resilient occupier base, a diversified tenant profile, and a stable economic outlook, the report noted.

Vacancy rates edged up marginally due to the new completions but remain in check at approximately 11.5 per cent in Bengaluru, 12.5 per cent in Delhi, and 17.3 per cent in Mumbai.

Knight Frank forecasted that India’s office market will maintain steady rental growth through 2026, supported by sustained economic fundamentals, government-led digital initiatives, and the expansion of GCCs across Tier-I and emerging Tier-II cities.

- IANS