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India’s office market has emerged as a bright spot in the Asia-Pacific region, defying the regional slowdown with strong growth in key cities. Bengaluru, Delhi-NCR, and Mumbai posted an average 4.3% year-on-year increase in prime office rents during the July–September 2025 quarter, according to Knight Frank’s Asia-Pacific Office Highlights Q3 2025 report. The country’s office leasing activity is expected to reach 50 million square feet in 2025, surpassing the previous record of 41 million square feet set in 2024, largely driven by demand from Global Capability Centres (GCCs) and a revival in third-party IT services.
Sustained Rental Growth Despite Supply Influx
Even with an influx of nearly 9 million square feet of new office space during the quarter, prime rents in India’s top three markets — Bengaluru, Delhi-NCR, and Mumbai — rose an average of 4.3% YoY, demonstrating the resilience and strength of the market.
Office leasing momentum remained robust, with 8.8 million square feet transacted in Q3 alone. Knight Frank projects that full-year leasing volumes across Bengaluru, Delhi-NCR, and Mumbai will hit 50 million square feet, driven by consistent occupier demand from GCCs and expanding IT services companies.
City-Level Performance
Among India’s top markets, Bengaluru led the charge with strong absorption, especially in emerging corridors like Outer Ring Road and Whitefield. Prime office rents in Bengaluru rose 2% quarter-on-quarter and 8.8% YoY, reflecting both demand and limited availability in key locations.
Delhi-NCR recorded 2% QoQ and 3% YoY rental growth, while Mumbai posted 2% QoQ and 3.9% YoY increases. Central business districts continued to command premium rents, with Bengaluru’s CBD averaging ?1,807 per square foot per year, Mumbai’s BKC at ?3,953, and Delhi’s Connaught Place at ?4,200.
Vacancy rates edged slightly higher due to new completions but remain under control at 11.5% in Bengaluru, 12.5% in Delhi-NCR, and 17.3% in Mumbai, showing a healthy balance between supply and demand.
GCCs and IT Drive Leasing Demand
The report highlights that sustained leasing by Global Capability Centres and a revival in third-party IT services are key drivers behind India’s office leasing boom. GCCs continue to expand across Tier-I cities and emerging Tier-II locations, attracted by India’s deep talent pool, improving infrastructure, and favourable economic fundamentals.
Shishir Baijal, chairman and managing director of Knight Frank India, said, “India’s office market continues to stand out as a beacon of stability and long-term potential amid regional uncertainty. The strong leasing activity underscores the country’s growing importance in global business strategies. With GCCs expanding and renewed activity in the IT sector, India is becoming a hub for dynamic, tech-driven office spaces that reflect flexible and hybrid working models.”
APAC Comparison Shows Divergence
India’s strong performance contrasts sharply with trends across the broader Asia-Pacific region, where many markets experienced muted rental growth. On average, prime office rents across APAC fell 1.4% YoY in Q3, with rental growth flat at 0.0% quarter-on-quarter. Markets in mainland China and Southeast Asia saw declines or stagnation, offsetting continued strength in Australia and India. Of the 23 cities monitored in the region, 16 recorded stable or rising rents, down slightly from 17 cities in Q2.
This divergence highlights India’s competitive position as a resilient office market, benefiting from a diversified tenant base, strong occupier demand, and a stable economic backdrop.
Outlook for 2026
Knight Frank expects India’s office market to maintain steady rental growth through 2026. Factors supporting this trajectory include continued expansion of GCCs, government-led digital initiatives, and the increasing adoption of technology in office operations. With demand for income-generating, Grade-A office assets remaining strong, India’s office leasing market is poised to sustain its momentum, attracting both domestic and global investors.
As occupiers embrace hybrid work models and technology-driven operations, India’s office market is evolving into a more dynamic, professional, and resilient ecosystem. The combination of robust leasing activity, controlled vacancies, and healthy rental growth signals a new phase of growth for India’s commercial real estate sector, setting it apart in the Asia-Pacific landscape.
