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Office leasing across Bengaluru, Mumbai and Delhi-NCR declined 13.6 per cent year-on-year in the July-September quarter of 2026, even as prime office rents rose by an average of 7.5 per cent annually, according to a report by real estate consultancy Knight Frank.
The Asia-Pacific Research, Office Markets - Q3 2026 report showed that combined office leasing across the three cities stood at 7.6 million square feet during the quarter. Despite the decline in leasing activity, demand for prime office spaces remained strong, supported by global capability centres (GCCs), flexible workspace operators and domestic businesses. Shishir Baijal, Chairman and Managing Director, Knight Frank India, said, "Rental growth across India's key office markets reflects the continuing premium placed on quality and location." Bengaluru recorded the highest annual rental growth among the three Indian markets at 11.5 per cent, ranking fourth among 24 Asia-Pacific office markets tracked by Knight Frank. The city matched Tokyo's annual rental growth rate. Delhi-NCR ranked eighth in the region with rental growth of 5.4 per cent, while Mumbai recorded an increase of 4 per cent. "Bengaluru's stronger growth highlights the value of well-positioned office assets, while Mumbai and Delhi-NCR reflect the distinct dynamics of more mature business markets," Baijal said. The report also highlighted differences in leasing activity across the three cities. Mumbai recorded a 33 per cent year-on-year increase in leasing transactions, with volumes during the first nine months of 2026 already exceeding the city's full-year total for 2025. Bengaluru, meanwhile, witnessed a moderation in leasing activity following a strong first half of the year. However, GCCs continued to account for nearly 50 per cent of the city's leasing demand. On office occupancy costs, Delhi-NCR emerged as the seventh-most expensive prime office market in Asia-Pacific at USD 73.11 per square foot annually, followed by Mumbai at USD 68.39. Bengaluru remained relatively affordable at USD 37.16. Across Asia-Pacific, prime office rents increased 1 per cent quarter-on-quarter, with 16 of the 24 markets recording stable or rising rents. Looking ahead, Knight Frank expects leasing activity across Bengaluru, Mumbai and Delhi-NCR to remain broadly in line with the record levels witnessed in 2025. Baijal said, "The ability of prime offices to command higher rents remains an important indicator of market depth and the evolving preferences of businesses." (ANI)
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