Bengaluru leads India's office rental growth at 11.5 pc in Q3, equal to Tokyo
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India's commercial real estate growth remains intact with Bengaluru recording 11.5 per cent year-on-year growth in prime office rents in Q3 2026 in Asia-Pacific, matching Tokyo among the region's strongest-performing markets, according to a report released on Friday.
As per the analysis of Knight Frank, Mumbai and Delhi-NCR recorded year-on-year (YoY) rental growth of 4 per cent and 5.4 per cent, respectively.
Across Asia-Pacific, prime office rents increased 1 per cent quarter-on-quarter (QoQ), it said. Of the 24 markets tracked, 16 recorded stable or rising rents.
However, Hong Kong SAR posted the strongest year-on-year growth at 17.1 per cent, while Bengaluru recorded a 2.8 per cent QoQ increase.
Meanwhile, among Indian cities, Delhi-NCR ranked seventh overall at $73.11 per sq ft per annum, followed by Mumbai at $68.39 and Bengaluru at $37.16.
Office leasing across Bengaluru, Mumbai and Delhi-NCR totalled 7.6 million sq ft in Q3 2026, down 13.6 per cent YoY.
However, prime rents remained resilient and rose by an average of 7.5 per cent annually.
According to the report, demand was primarily driven by global capability centres (GCCs), flexible workspace operators and domestic occupiers which helped offset weaker activity from third-party IT services firms.
In terms of leasing transactions, Mumbai recorded a 33 per cent YoY increase with year-to-date volumes already surpassing the city's full-year 2025 total.
India-focused occupiers contributed more than half of the quarterly leasing activity.
Meanwhile, Bengaluru experienced a moderation following a strong first half of 2026, while GCCs continued to account for nearly 50 per cent of its leasing demand.
Despite a significant rise in new office completions, vacancy levels remained largely stable, the report said.
Bengaluru led rental growth among India's major office markets with prime rents rising 11.5 per cent YoY and 2.8 per cent QoQ to Rs 2,015 per sq ft per annum.
Vacancy stood at 13.4 per cent. In Mumbai, prime rents increased by 4 per cent YoY and 2.0 per cent QoQ to Rs 4,111 per sq ft per annum, while vacancy reached 15.2 per cent.
Delhi-NCR recorded annual rental growth of 5.4 per cent with rents remaining stable compared with the previous quarter.