India’s office market on strong footing as rents rise: Report

New Delhi, April 18 India’s office market remains on a strong footing amid geopolitical tensions, with rising rents and limited new supply reinforcing growth across key cities, according to a report released on Saturday.

The report by property consultancy Knight Frank highlighted that rental values continued to firm up across major markets even as new office completions lagged behind demand.

Leasing activity stayed robust during the first quarter of 2026, with 18.8 million square feet transacted across Bengaluru, Mumbai and Delhi-NCR, a 3 per cent increase compared to the same period last year, it said.

The demand was more evenly spread across cities, signalling a maturing and diversified office market.

However, supply additions remained constrained, with only 8.5 million square feet of office space completed during the quarter, which is less than half of the leasing volume. While developers continued to prioritise residential projects, limiting fresh office inventory.

Moreover, the report also noted that the tightening demand-supply gap is expected to keep rental values firm in the near term, particularly in prime office assets that continue to attract occupiers.

Among key markets, Bengaluru led rental growth with a 14 per cent year-on-year increase, the highest in the Asia-Pacific region. Mumbai and Delhi-NCR also recorded steady gains of 7.5 per cent and 8.2 per cent, respectively.

Meanwhile, Mumbai emerged as a standout performer in leasing activity, recording a quarterly high of 5.6 million square feet.

The report also pointed out that Global Capability Centres (GCCs) remained the primary drivers of demand, while domestic-focused companies also increased their leasing activity.

Shishir Baijal, Chairman and Managing Director of Knight Frank India, said that the office market is seeing sustained demand supported by both global and domestic occupiers.

He added that with supply additions trailing leasing activity and occupiers prioritising quality assets, rental values in prime office markets are likely to remain firm in the near to medium term.

Tim Armstrong, Global Head of Occupier Strategy and Solutions at Knight Frank, said occupier sentiment across the Asia-Pacific region remains resilient despite geopolitical uncertainties.

He noted that companies are increasingly viewing real estate as a strategic enabler of stability and long-term growth, with a growing preference for energy-efficient and well-located office spaces.

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