India’s prime office markets experienced robust demand in the second quarter of 2026, with Bengaluru recording a 10.7% annual rent increase amid structural shifts in occupier strategies, according to Knight Frank’s APAC Prime Office Rental Index.
India’s prime office markets posted healthy demand in the second quarter of 2026, even as leasing cooled from the elevated pace set a year earlier, according to Knight Frank’s APAC Prime Office Rental Index. Bengaluru stood out again, with prime office rents rising 10.7% year on year, the strongest increase among Indian cities and one of the fastest gains in Asia-Pacific. Delhi-NCR followed with 7.6% growth, while Mumbai recorded a 4% rise.
Knight Frank said the market remained supported by steady vacancy levels, despite more than 7 million square feet of new office supply completing during the quarter. Shishir Baijal, international partner, chairman and managing director at Knight Frank India, said in the report issued Monday that demand was still strong even after last year’s heavy leasing volumes, underscoring India’s pull as a global business location.
The consultancy also pointed to a shift in the mix of occupiers. Flexible workspace operators overtook financial services as one of the largest leasing groups across gateway markets, accounting for more than 30% of leasing volume, while global capability centres continued to anchor demand. Baijal said that expansion by these centres, alongside the rise of flexible workspace, reflected a structural change in occupier strategy rather than a short-term cycle.
Across Asia-Pacific, prime office rents rose 0.6% quarter on quarter, with 19 of the 24 cities tracked by Knight Frank either holding steady or posting gains. The firm said technology and artificial intelligence-related companies were helping to support demand for premium office space, while Tim Armstrong, global head of occupier strategies and solutions at Knight Frank, said tighter development pipelines and stronger demand from AI and innovation sectors would likely intensify competition for high-quality space. Knight Frank expects the move towards higher-grade offices to remain a defining feature of India’s market as companies continue to rework their property portfolios.
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