India’s top office markets recorded healthy occupier demand in the second quarter of 2026, with Bengaluru leading prime office rental growth among Indian cities, even as leasing moderated from the highs of 2025, according to the Knight Frank Asia-Pacific (Apac) Prime Office Rental Index.

“Demand remains healthy despite the elevated leasing base established last year, reflecting the country’s enduring appeal as a global business destination,” Shishir Baijal, international partner, chairman and managing director at Knight Frank India, said in the report issued recently.

Bengaluru recorded 10.7 per cent year-on-year rental growth, the fastest among Indian cities and among the top performers in the Apac region. In comparison, Delhi-National Capital Region and Mumbai followed at 7.6 per cent and 4 per cent, respectively.

Demand remained robust, according to the index, supported by stable vacancy levels despite more than 7 million square feet of new office completions during the quarter.

Meanwhile, flexible (flex) workspace operators overtook financial services as the largest occupier group, accounting for more than 30 per cent of leasing volumes across gateway office markets, while global capability centres (GCCs) continued to anchor occupier demand.

“The continued expansion of GCCs and the increasing participation of flex workspace operators reflect structural changes in occupier strategies rather than cyclical shifts,” Baijal added.

In the Apac region, prime office rents grew 0.6 per cent sequentially, with 19 of the 24 cities tracked by the index recording stable or increasing rental levels. The growth was driven by occupier demand for premium office spaces, supported by technology and artificial intelligence (AI)-related companies. Bengaluru, Hong Kong SAR (Special Administrative Region), and Tokyo led annual rental growth across the region.

“As development pipelines moderate and demand expands beyond traditional sectors into rapidly growing AI and innovation ecosystems, competition for high-quality space will only intensify across Apac,” Tim Armstrong, global head of occupier strategy and solutions at Knight Frank, said.

Real estate consultancy Knight Frank expects the flight-to-quality trend to remain a defining characteristic of India’s office market as occupiers continue to optimise their real estate portfolios.