Bengaluru led the Asia-Pacific region with a 14% YoY growth in prime office rents in Q1 2026, a Knight Frank report noted. Mumbai and Delhi-NCR also saw significant rental growth, highlighting India's resilient commercial real estate market.
Knight Frank in its latest report, 'Asia Pacific Research, Office Markets - Q1 2026', noted that Bengaluru recorded the highest year-on-year (YoY) growth in prime office rents across the Asia Pacific (APAC) region recording a rise of 14 per cent in Q1 2026 over same time last year.
The performance highlights India's resilience within the APAC office markets, with rental growth remaining firm across major office markets, posting YOY prime office rent growth. Mumbai and Delhi - NCR recorded rent growth of 7.5 per cent and 8.2 per cent YoY, respectively, during the same quarter, according to the report.
Out of the 24 prime markets tracked across Asia-Pacific, 18 recorded increased rents sustaining the recovery momentum in Q1 2026, with regional rents rising 0.8 per cent quarter-on-quarter (QoQ), even as the escalation of the conflict in the Middle East reintroduced geopolitical uncertainty.
Market Rankings and Occupancy Costs
According to the report, sustained demand from India and Australia drove the headline gain, while 18 of 24 monitored cities recorded stable or improving rents, up from 17 in Q4 2025.
Across APAC, Hong Kong SAR recorded the highest occupancy cost at USD 158.96 per sq ft per annum, while within India, the prime office market of Delhi-NCR continues to see rental values maintain levels seen in the past four quarters.
The prime office rent of the city was recorded at USD 72.33/sqft/year, making it the 6th most expensive office market in the APAC region. Followed by this, the prime office rent of Mumbai was recorded at INR USD 68.51/sqft/year and was the 8th most expensive commercial market in the APAC region. Further to this, Bengaluru stands 19th with the prime office rent recorded at USD 36.84/sqft/year.
Leasing Demand Outpaces Supply
Leasing demand remained robust with 18.8 million square feet transacted across India's largest office markets of Bengaluru, Mumbai and Delhi-NCR during the quarter, up 3 per cent from the same period in 2025. Mumbai stood out with leasing volumes reaching a quarterly record of 5.6 million square feet transacted.
Unlike previous years, when demand was heavily concentrated in Bengaluru, leasing activity was broad-based across markets, pointing to a more balanced and geographically diversified expansion in office demand.
While GCCs remained the primary driver, demand from domestic-focused businesses also noticeably accelerated. Office completions continue to trail demand, as developer focus remains skewed toward residential projects. The 8.5 million sqft delivered during the quarter is less than half of the leases transacted during the quarter.
Leasing activity remained overwhelmingly concentrated in prime office assets, a trend which has deepened in recent years, underpinned by the expansion of GCCs and growing integration of flexible workspace solutions within core office portfolios.
City-Specific Performance Analysis
Bengaluru led with 14 per cent rental growth (highest in APAC) and 41 per cent of GCC leasing, supported by stable vacancy at 11.8 per cent and a slight landlord bias.
Mumbai was the standout performer, recording a peak leasing volume of 5.6 million sq ft and 7.5 per cent rental growth; with vacancy at 16.2 per cent, rents are expected to rise further from Rs 4,025 per sqft per annum.
Delhi-NCR saw steady momentum, with rents up 8.2 per cent year-on-year and 3.7 per cent quarter-on-quarter; vacancy at 14.2 per cent is expected to keep rents stable at Rs 4,428 per sq ft per annum, reflecting a slight tenant preference.
Shishir Baijal, International Partner, Chairman and Managing Director, Knight Frank India, said, "Leasing demand across India's prime office markets has remained resilient, with activity becoming more broad-based across Bengaluru, Mumbai and Delhi-NCR. The diversification of demand beyond traditional hubs reflects a maturing office market supported by both global and domestic occupiers."
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