India is entering 2026 as one of the most resilient real estate markets in the Asia-Pacific region, standing out at a time when global volatility, trade tensions and cautious capital flows are reshaping property markets worldwide. According to Knight Frank’s Asia-Pacific Outlook 2026, India’s real estate story is no longer just about scale or low costs. It is increasingly about quality, flexibility and a maturing ecosystem that aligns closely with occupier needs.
While the broader Asia-Pacific economy is expected to slow in 2026, India’s domestic fundamentals continue to provide a strong buffer. A large talent pool, steady consumption, regulatory stability and rising institutional depth have positioned the country as a preferred destination for global occupiers and investors looking for long-term certainty rather than short-term gains.
Office market: demand stays strong, quality matters more
India heads into 2026 with one of the strongest office market outlooks in the region. Knight Frank notes that the country recorded among the highest leasing volumes in Asia-Pacific in 2025, driven largely by Global Capability Centres (GCCs), technology firms and engineering-led enterprises expanding their India presence. Gross leasing volumes are expected to cross 80 million square feet in 2025, setting the stage for continued momentum in 2026.
Bengaluru, Mumbai and the National Capital Region remain the key growth engines. Rentals in these cities are projected to grow between 7.5% and 9% year-on-year in 2026, placing India among the top rental growth markets in the region. A major milestone was crossed in 2025, with India’s top eight cities together surpassing one billion square feet of Grade A office stock, underscoring the scale and maturity of the market.
Shishir Baijal, Chairman and Managing Director of Knight Frank India, says India’s relative advantage lies in a combination of affordability, talent depth and regulatory consistency. Compared to many global hubs, India continues to offer high-quality office space at significantly lower costs, making it attractive for multinational firms consolidating operations amid global uncertainty.
Retrofitting and repositioning take centre stage
One of the defining themes for 2026 is the growing focus on retrofitting older office assets. Many buildings developed in the early 2000s are nearing functional obsolescence, prompting landlords to invest in upgrades. These include modern HVAC systems, improved natural lighting, digital workplace technologies and sustainability-driven enhancements.
The shift reflects changing occupier expectations. Companies are no longer paying for space alone. They are paying for performance, energy efficiency, employee well-being and ESG alignment. Buildings that fail to meet these benchmarks risk losing relevance, even in strong micro-markets.
This is also leading to sharper polarisation within the office market. As Grade A assets now account for more than half of total supply in major cities, occupiers are increasingly consolidating into newer, future-ready developments. Older buildings that do not undergo meaningful upgrades are likely to face pricing pressure and higher vacancies.
Flexibility becomes a strategic priority
Flexibility is expected to play an even bigger role in 2026. Against a backdrop of global trade uncertainty and cautious capital deployment, enterprises are favouring shorter lease tenures, expansion-ready floors, managed offices and hybrid-fit solutions. India’s cost competitiveness strengthens its appeal in this context. In several major markets, office rentals remain below USD 1 per square foot per month, offering global firms room to optimise costs without compromising on scale or talent access.
This flexibility is turning India into a strategic consolidation hub, particularly for multinational corporations seeking operational depth, resilience and financial prudence in one location.
How India compares with the rest of Asia-Pacific
India’s relative strength becomes more pronounced when compared with other Asia-Pacific markets. In Greater China, office markets continue to grapple with high vacancies and downward rental pressure as new supply meets cautious occupier sentiment. Singapore and parts of Southeast Asia remain structurally strong but are seeing rental moderation as occupiers prioritise cost control and shorter commitments.
Australia’s major office markets, especially Sydney and Melbourne, continue to favour tenants, with high occupancy costs and subdued corporate expansion limiting demand. Against this backdrop, India stands apart as a structurally demand-driven market, supported by GCC expansion, domestic business growth and a deep, cost-competitive talent pool.
Limited oversupply in India’s core office hubs, steady rental growth and continued absorption of Grade A space point to a healthier supply-demand balance than many regional peers.
Logistics and industrial: India leads the pack
India’s outperformance is even more evident in the logistics and industrial segment. While logistics rental growth has come under pressure in China due to elevated vacancies, and Australian markets are normalising after a strong upcycle, India continues to see sustained occupier demand.
Knight Frank projects around 5% rental growth in key logistics hubs such as Bengaluru, Mumbai and NCR in 2026, again outperforming most Asia-Pacific markets. This growth is being driven by manufacturing expansion, resilient exports and the increasing adoption of China+1 strategies by global companies.
Government-led incentives, infrastructure upgrades and rising investment across electronics, automotive and industrial sectors are strengthening India’s role in global supply chains. As companies prioritise diversification and resilience, India’s skilled workforce, growing domestic market and strategic location make it a compelling long-term logistics base.
Asia-Pacific recalibrates, not retreats
Across the Asia-Pacific region, 2026 is shaping up as a year of recalibration rather than retreat. Trade tensions and tariff-related pressures are expected to temper regional GDP growth, but the underlying fundamentals remain strong. Intra-regional trade, AI-driven investments and the rise of new economic clusters continue to attract global capital.
Occupiers across the region are becoming more selective, gravitating towards flexible, future-ready and operationally resilient spaces. The emphasis is shifting from expansion at scale to precision and long-term value creation.
Tim Armstrong, Global Head of Occupier Strategy and Solutions at Knight Frank Asia-Pacific, notes that economic volatility and digital acceleration are reshaping occupier priorities. In 2026, the challenge for companies will be delivering both cost efficiency and transformation, supported by flexible leasing strategies and robust infrastructure.
Why India stands apart
Despite global uncertainty, India’s real estate trajectory is anchored in structural strength rather than cyclical recovery. Strong domestic demand, policy stability and improving governance continue to drive confidence across office and logistics assets. Record performance in these segments reflects a market that is not only growing, but also maturing.
As global markets recalibrate, India’s blend of affordability, scale, transparency and occupier-led growth positions it as one of the most strategically important real estate markets in Asia-Pacific in 2026 and beyond.
