Bengaluru office rents surge 11.5% in Q3 2026, matching Tokyo: Knight Frank

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Bengaluru office rents surge 11.5% in Q3 2026, matching Tokyo: Knight Frank

Synopsis

Bengaluru is growing its office rents as fast as Tokyo — despite charging a fraction of the price. Knight Frank's Q3 2026 data shows India's tech capital matching one of Asia's most established business hubs on rental momentum, while Mumbai's leasing volumes have already blown past their full-year 2025 mark. The GCC engine is clearly still running hot.

Key Takeaways

Bengaluru recorded 11.5% YoY prime office rental growth in Q3 2026 , matching Tokyo in the Asia-Pacific ranking, per Knight Frank .
Bengaluru prime rents rose to ₹2,015 per sq ft per annum ; Mumbai reached ₹4,111 and Delhi-NCR was the priciest at $73.11 per sq ft per annum in dollar terms.
Combined leasing across the three cities totalled 7.6 million sq ft in Q3, down 13.6% YoY , yet average prime rents still rose 7.5% annually .
Global capability centres (GCCs) accounted for nearly 50% of Bengaluru's leasing demand; domestic occupiers drove over half of national quarterly activity.
Mumbai leasing transactions surged 33% YoY , with year-to-date volumes already surpassing the full-year 2025 total.
Hong Kong SAR led Asia-Pacific YoY rental growth at 17.1% ; 16 of 24 markets tracked recorded stable or rising rents.

Bengaluru recorded 11.5 per cent year-on-year growth in prime office rents in Q3 2026, matching Tokyo as one of the strongest-performing markets in the Asia-Pacific region, according to a report by global property consultancy Knight Frank released on 31 October 2026. The finding underscores the resilience of India's commercial real estate sector even as overall leasing volumes dipped.

India's Top Office Markets at a Glance

Among Indian cities, Bengaluru led rental growth with prime rents rising to ₹2,015 per sq ft per annum — up 2.8 per cent quarter-on-quarter — while vacancy stood at 13.4 per cent. Mumbai saw prime rents climb 4 per cent YoY and 2 per cent QoQ to ₹4,111 per sq ft per annum, with vacancy at 15.2 per cent. Delhi-NCR recorded annual rental growth of 5.4 per cent, with rents stable quarter-on-quarter.

In US dollar terms, Delhi-NCR ranked seventh in the Asia-Pacific league table at $73.11 per sq ft per annum, followed by Mumbai at $68.39 and Bengaluru at $37.16. Notably, despite Bengaluru commanding the lowest absolute rent among the three, its YoY growth rate is the highest — signalling accelerating occupier demand rather than a pricing ceiling.

Asia-Pacific Context

Across the 24 Asia-Pacific markets tracked by Knight Frank, prime office rents rose 1 per cent quarter-on-quarter, with 16 of 24 markets recording stable or rising rents. Hong Kong SAR posted the region's strongest year-on-year growth at 17.1 per cent, while Bengaluru's 11.5 per cent growth placed it joint-second alongside Tokyo — a remarkable positioning for a city whose rents remain a fraction of either market's absolute levels.

Leasing Volumes and Demand Drivers

Combined office leasing across Bengaluru, Mumbai, and Delhi-NCR totalled 7.6 million sq ft in Q3 2026, a 13.6 per cent YoY decline. Despite this, prime rents across the three cities rose by an average of 7.5 per cent annually, according to the report — a divergence that points to tightening supply in premium micro-markets even as aggregate absorption softens.

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. India-focused occupiers contributed more than half of quarterly leasing activity. GCCs continued to account for nearly 50 per cent of Bengaluru's leasing demand, even as the city experienced a moderation following a strong first half of 2026.

Mumbai's Breakout Leasing Year

Mumbai stood out on transaction volumes, recording a 33 per cent YoY increase in leasing transactions, with year-to-date volumes already surpassing the city's full-year 2025 total. This comes amid significant new office completions across the market — yet vacancy levels remained largely stable, the report said, suggesting robust absorption of new supply.

What Comes Next

The sustained rental growth, even against a backdrop of lower overall leasing volumes, suggests that quality supply remains tight and occupier competition for Grade-A space is intensifying. How GCC expansion — and any shifts in India's IT services demand — play out in Q4 2026 will be the key variable to watch for the full-year rental outlook.

Point of View

But the more telling signal is the rent-volume divergence: leasing fell 13.6% yet rents rose 7.5% on average. That gap reflects a structural supply crunch in premium micro-markets, not broad-based demand strength. The GCC story is real, but it is also increasingly concentrated — nearly half of Bengaluru absorption — which means a single policy or global macro shift could expose the market's depth. Mumbai's leasing breakout is the underreported story: a city long seen as yielding ground to Bengaluru and Hyderabad has now outrun its own 2025 full-year volume before the year is out.
NationPress
30 Oct 2026

Frequently Asked Questions

How much did Bengaluru office rents grow in Q3 2026?
Bengaluru prime office rents grew 11.5% year-on-year and 2.8% quarter-on-quarter in Q3 2026, reaching ₹2,015 per sq ft per annum , according to Knight Frank. This matched Tokyo's growth rate, placing Bengaluru among the top performers in the Asia-Pacific region.
Which Asia-Pacific city recorded the highest office rental growth in Q3 2026?
Hong Kong SAR posted the highest year-on-year prime office rental growth in Asia-Pacific at 17.1% in Q3 2026, per the Knight Frank report. Bengaluru and Tokyo were joint-second at 11.5% .
How did Mumbai perform in India's office market in Q3 2026?
Mumbai recorded a 33% YoY increase in leasing transactions in Q3 2026, with year-to-date volumes already exceeding the city's full-year 2025 total. Prime rents rose 4% YoY to ₹4,111 per sq ft per annum .
What is driving office leasing demand in Indian cities?
Demand in India's major office markets is primarily being driven by global capability centres (GCCs) , flexible workspace operators, and domestic occupiers, according to Knight Frank. GCCs alone accounted for nearly 50% of Bengaluru's leasing activity, offsetting weaker demand from third-party IT services firms.
Why did overall office leasing volumes fall in India despite rising rents?
Combined leasing across Bengaluru, Mumbai, and Delhi-NCR fell 13.6% YoY to 7.6 million sq ft in Q3 2026, partly due to moderation in Bengaluru after a strong first half and softer third-party IT services activity. However, competition for premium Grade-A space remained intense, keeping prime rents on an upward trajectory with an average annual rise of 7.5% .
Nation Press
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