India's top three office markets — Bengaluru, Mumbai, and Delhi-NCR — collectively leased 9.8 million square feet of office space in Q2 2026, according to a report released on Monday, 17 August 2026 by property consultancy Knight Frank. While leasing moderated from the exceptionally high levels recorded in 2025, demand remained robust, underpinned by stable vacancy levels even as over 7 million square feet of new supply entered the market.

Rental Growth Across Key Cities

Bengaluru posted the sharpest rental growth among Indian cities, with prime office rents rising 10.7 per cent year-on-year to reach ₹163 per sq ft per month in Q2 2026. This compares with a 7.9 per cent YoY increase recorded in Q2 2025, when prime rents stood at ₹148 per sq ft per month, signalling an acceleration in rental appreciation.

Delhi-NCR followed with rental growth of 7.6 per cent YoY, while Mumbai recorded a more measured increase of 4 per cent YoY. The divergence reflects Bengaluru's outsized role as India's technology and Global Capability Centre (GCC) hub.

GCCs and Flex Operators Drive Demand

Global Capability Centres (GCCs) continued to anchor occupier demand across India's gateway office markets. Notably, flex space operators accounted for over 30 per cent of leasing volumes across the three cities, overtaking financial services to become one of the largest occupier groups. This structural shift reflects the growing adoption of flexible workplace strategies by large corporates seeking greater portfolio agility.

India's Standing in Asia-Pacific

Across the Asia-Pacific region, prime office rents increased 0.6 per cent quarter-on-quarter during Q2 2026, with 19 of the 24 tracked cities recording stable or rising rental levels. Bengaluru, Hong Kong SAR, and Tokyo led annual rental growth across the region, with technology and AI-related occupiers continuing to generate demand for premium office space.

What Industry Leaders Said

Shishir Baijal, International Partner, Chairman and Managing Director, Knight Frank India, said: 'India's office market continues to demonstrate remarkable depth and resilience. Demand remains healthy despite the elevated leasing base established last year, reflecting the country's enduring appeal as a global business destination.'

Baijal added that stable vacancy levels alongside rental growth indicate a market that continues to absorb new supply efficiently. 'While organisations continue to adapt to AI adoption and evolving macroeconomic conditions, India's talent advantage, business ecosystem and strategic role in global corporate operations continue to underpin long-term office demand,' he said.

What to Watch

The sustained rise in flex space leasing and GCC expansion suggests India's office market is undergoing a structural, not merely cyclical, upgrade. With new completions being absorbed without triggering vacancy spikes, the near-term outlook for prime rents — particularly in Bengaluru — remains upward-leaning, barring a sharp global macro deterioration.