India’s office market continues to thrive despite geopolitical tensions, with rising rents and limited new supply driving growth in key cities. A recent report by property consultancy Knight Frank revealed that rental values are strengthening in major markets, outpacing the slow pace of new office completions. During the first quarter of 2026, leasing activity remained strong, with 18.8 million square feet transacted in Bengaluru, Mumbai, and Delhi-NCR, marking a 3% increase from the previous year.
The demand for office spaces was well-distributed across cities, indicating a mature and diversified market landscape. However, the supply of new office spaces remained restricted, with only 8.5 million square feet completed during the quarter, falling short of meeting the leasing demand. Developers’ focus on residential projects has limited the availability of fresh office inventory in the market.
Knight Frank’s report highlighted that the demand-supply gap is narrowing, which is expected to maintain the firmness of rental values, especially in prime office assets that are attracting occupiers. Bengaluru led the rental growth with a significant 14% year-on-year increase, the highest in the Asia-Pacific region, while Mumbai and Delhi-NCR also saw steady gains of 7.5% and 8.2%, respectively.
Mumbai stood out as a top performer in leasing activity, achieving a quarterly high of 5.6 million square feet. Global Capability Centres (GCCs) continued to drive demand, with domestic-focused companies also increasing their leasing activities. Shishir Baijal, Chairman and Managing Director of Knight Frank India, emphasized the sustained demand in the office market, driven by both global and domestic occupiers. He predicted that rental values in prime office markets would remain strong in the near to medium term due to the lag in supply additions compared to leasing activities.
Tim Armstrong, Global Head of Occupier Strategy and Solutions at Knight Frank, highlighted the resilient occupier sentiment in the Asia-Pacific region despite geopolitical uncertainties. Companies are recognizing real estate as a strategic asset for stability and long-term growth, showing a preference for energy-efficient and well-located office spaces.
