In the latest report from Knight Frank on office highlights across Asia Pacific (APAC), India’s office market is set to outperform the Asia-Pacific region in 2026, with prime office rents forecast to grow 7–10%, significantly ahead of most regional peers, according to Knight Frank’s Asia-Pacific Office Highlights Q4 2025. While Asia-Pacific office markets are showing early signs of stabilisation after two years of rental declines, India has emerged as the growth engine of the region, supported by strong leasing momentum, sustained expansion of Global Capability Centres (GCCs), and increasing preference for high-quality, future-ready office spaces.

INDIA LEASING HITS RECORD LEVELS

India’s three largest office markets—Bengaluru, Mumbai and Delhi-NCR—collectively recorded approximately 50 mn sq ft of leasing in 2025, marking a 21% year-on-year increase and the highest annual absorption ever recorded across these markets. Bengaluru led regional performance, registering 13.8% annual Prime rental growth and a sharp 7.4% quarter-on-quarter increase in Q4 2025, the strongest among all tracked Asia-Pacific cities.

For Bengaluru, 2025 marked the most prolific year on record in terms of area leased, while annual take up in Mumbai and NCR was second only to 2024 levels. As a result, total leasing commitments across these three markets reached a record 50 mn sq ft in 2025, representing a 21% increase over 2024. Beyond Global Capability Centres, demand was also supported by flex office operators and the information technology outsourcing sector. This sustained demand translated into upward pressure on rents, which rose 5.8% year-on-year in 2025.

Mumbai and Delhi-NCR also delivered robust outcomes, with steady rental appreciation in prime micro-markets and rising interest from financial services, flex office operators and global corporates seeking consolidation into fewer, higher-quality locations.

INDIA BUCKS REGIONAL SUPPLY PRESSURES

Across Asia-Pacific, more than 100 mn sq ft of new office space is expected to be delivered in 2026, likely pushing regional vacancy levels higher and muting rental growth. In contrast, India’s demand fundamentals remain strong enough to absorb new supply, with over 43 mn sq ft of completions expected in 2026 without materially weakening rental momentum.

The ongoing flight-to-quality trend, evident across the region, is particularly pronounced in India, where occupiers are prioritising ESG-compliant buildings, flexible layouts, and locations that support talent attraction and productivity.

Shishir Baijal, International Partner, Chairman and Managing Director, Knight Frank India, said, “India’s office market has decisively moved into a phase of structurally stronger demand with gross absorption surpassing the last year’s peak by 20% closing at 86.4 mn sq ft for top eight cities. Global Capability Centres, third party IT businesses and financial services firms are not only expanding but also committing early to high-quality developments. This confidence reflects India’s growing role in global business ecosystems. Occupier demand is expected to remain strong in 2026 with higher supply volumes supporting market traction during the year. For occupiers and investors alike, India remains one of the most compelling office markets globally.”

OUTLOOK

With Asia-Pacific office supply expected to decline sharply from 2027 onward, India’s current cycle of strong pre-leasing, improving asset quality and sustained occupier confidence positions it favourably for medium-term rental growth and capital value appreciation, even as other regional markets contend with oversupply and muted demand.

Tim Armstrong, Global Head of Occupier Strategy and Solutions, Knight Frank, says, “The region’s growth fundamentals and technology sector expansion remain strong, but trade policy shifts will continue to create uncertainty in 2026. Against this backdrop, occupiers face a tightening supply landscape as new construction drops sharply from 2027 onward. Rising costs and rapid technological change are pushing companies to rethink their real estate strategies. The key is taking a long-term view, securing quality, adaptable spaces that can accommodate future needs while optimising current footprint. Corporate real estate leaders will be asked to cut costs while enabling business transformation, mitigating volatility, and preparing for growth. Balance will be essential, but bravery will be decisive.”