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.