India Dominates APAC Office Market Performance in Q1, according to Knight Frank report. While the region recorded a 0.9% quarter-on-quarter (Q-on-Q) decline in prime office rents, Indian cities such as Bengaluru, Mumbai, and Delhi-NCR registered robust leasing activity, bolstered by strong domestic demand and the continued expansion of Global Capability Centres (GCCs).
In Q1 2025, leasing volumes in India’s top three office markets surged to 1.7 million sq m, making India a notable exception. This impressive performance contrasts with several APAC markets like Shanghai and Hong Kong, which have declining rents and elevated vacancies.
Among Indian cities, Delhi-NCR reported a vacancy rate of 11%, closely followed by Bengaluru at 11.2%. However, Mumbai recorded a higher vacancy of 17.6%, reflecting the effects of substantial new supply entering the market and cautious leasing sentiment.
Tightening supply in Indian and Southeast Asian markets helped stabilise regional vacancy rates, even as cities in China experienced growing availability. Bengaluru continued to lead India's GCC-driven leasing, accounting for 65% of all activity from this occupier segment, further cementing its role as the country’s tech and innovation hub.
Mumbai experienced a softening in rents as landlords prioritised occupancy amid a large upcoming supply pipeline for 2025. At the same time, flex space operators maintained their upward trajectory, with demand rising by 28% year-on-year (Y-o-Y), primarily driven by startups and SMEs.
Shishir Baijal, Chairman and Managing Director of Knight Frank India, said, “India remains a standout in the Asia-Pacific office market, demonstrating remarkable resilience amidst global headwinds. The sustained momentum from GCCs, domestic occupier confidence, and co-working sector expansion have been key to this performance. We expect India's office sector to stay upward with infrastructure developments and fresh supply in the pipeline, particularly in cities like Mumbai and Delhi-NCR."
