Office Rents in Indias Major Markets Surge by 10% in Q2 2026, Bengaluru Leads the Way

New Delhi, August 17: Office rents in India’s major markets have seen an increase of up to 10% in the second quarter of 2026. During this period, the demand for office space remained around 10 million square feet, according to a report released on Monday.

As per Knight Frank’s report, leasing activity in Bengaluru, Mumbai, and Delhi-NCR collectively reached approximately 9.8 million square feet in Q2 2026. Although this marks a slight decline compared to the high leasing activity observed in 2025, the leasing market remained robust, with over 7 million square feet of new space becoming available while vacancy levels remained stable.

Bengaluru recorded the highest annual rent increase among Indian cities, with a rise of 10.7%. Following closely were Delhi-NCR at 7.6% and Mumbai at 4%. In Bengaluru, prime office rents reached ₹163 per square foot per month. In the second quarter of 2025, Bengaluru’s prime office rent had increased by 7.9% year-on-year to ₹148 per square foot per month.

Global Capability Centers (GCCs) have maintained demand for office space in India’s major markets. Additionally, the share of flexible space operators in leasing volumes in Bengaluru, Delhi-NCR, and Mumbai exceeded 30%, making them one of the largest occupier groups, surpassing financial services.

The rapid adoption of flexible workplace strategies by large companies indicates a significant shift in portfolio planning, as organizations seek to adapt quickly to changing workplace needs.

In the Asia-Pacific region, prime office rents saw a quarter-on-quarter increase of 0.6% in Q2 2026, with rental levels remaining stable or increasing in 19 out of the 24 tracked cities.

In terms of annual rent growth across the region, Bengaluru, Hong Kong SAR, and Tokyo led the way, driven by sustained demand for premium office space from technology and AI-related companies.

Shishir Baijal, International Partner, Chairman, and Managing Director of Knight Frank India, stated, “India’s office market continues to demonstrate strength and resilience. Despite a high leasing base last year, demand remains strong, reflecting the country’s ongoing appeal as a global business destination.”

Baijal further noted that the increase in rents alongside stable vacancy levels indicates that the market is efficiently absorbing new supply.

He added, “While companies are adapting to AI and changing macroeconomic conditions, India’s talent advantage, business ecosystem, and strategic role in global corporate operations sustain long-term demand for office space.”