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India's office market is set for a record-breaking year, standing firm against a broader slowdown across the Asia-Pacific region, according to Knight Frank's Asia-Pacific Office Highlights Q3 2025 report. Despite economic headwinds, leasing activity in India's major cities continues to surge, powered by strong demand from Global Capability Centres (GCCs) and the revival of third-party IT services.
Citing the report, a Knight Frank press release states that India transacted 8.8 million square feet of office space in the third quarter of 2025 alone. Bengaluru, Delhi-NCR, and Mumbai together are expected to touch a combined leasing volume of 50 million square feet by year-end, surpassing the previous record of 41 million square feet set in 2024. Despite the addition of nearly nine million square feet of new supply, office rents in India's top three markets, Bengaluru, NCR, and Mumbai, rose an average of 4.3 per cent year-on-year. The release attributes this resilience to India's diversified tenant base and stable economic outlook. In contrast, many Asia-Pacific landlords focused on occupancy rather than rent growth due to higher vacancies. Bengaluru remained the country's most dynamic market, with rents rising two per cent quarter-on-quarter and 8.8 per cent year-on-year. Delhi-NCR and Mumbai followed with modest yet steady increases. Vacancy rates in the three cities stood at 11.5 per cent, 12.5 per cent, and 17.3 per cent respectively. Shishir Baijal, Chairman and Managing Director, Knight Frank India, said, "India's office market continues to stand out as a beacon of stability and long-term potential amid regional uncertainty. The strong leasing activity highlights its growing importance in global business strategies. Continued interest from GCCs and renewed activity in the IT sector point to India's deep talent pool, improving infrastructure, and investor trust." Across the wider Asia-Pacific region, prime office rents fell by 1.4 per cent year-on-year, with rental growth stagnating at 0.0 per cent compared to the previous quarter. Chinese mainland cities saw the steepest declines, while markets such as Australia managed to maintain steady momentum. Knight Frank noted that this divergence underscores India's distinct resilience and continued attractiveness to global occupiers. Tim Armstrong, Global Head of Occupier Strategy and Solutions at Knight Frank, said, "Occupier priorities have continued to evolve amid ongoing geopolitical and technological shifts. In this environment, flexibility and resilience have become non-negotiable. Corporates are committing to new spaces, but with a clear emphasis on agility." "Rental growth in the region will likely remain subdued amid strong construction deliveries over the past two years and the backfill space created. However, the flight to quality will continue to support demand for premium office space across key Asia-Pacific markets heading into 2026," the release noted. (ANI)
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