NEW DELHI: Prime office rents in Bengaluru and Delhi-NCR have surpassed Rs 100 per sq ft for the first time, driven by demand outstripping supply, according to Knight Frank’s latest data. In Mumbai, average office rents have already crossed this threshold.
The data indicates that office space rentals in eight major Indian cities increased by 2 to 15 percent from January to March 2026 compared to the same period last year.
The highest annual growth rate of 15 percent was observed in Delhi-NCR and Kolkata. “Supply constraints in key markets have fostered a persistent rental upcycle since early 2022,” Knight Frank stated in its Q1 2026 report on the Indian office market.
The report noted that rental growth in Q1 2026 remained robust, ranging from 2 to 15 percent year-on-year across various cities.
“Importantly, NCR and Bengaluru have now crossed an average rental rate of Rs 100 per sq ft,” the report explained.
Specifically, Mumbai’s average monthly office rent increased 6 percent annually to Rs 125 per sq ft. In Delhi-NCR, rents surged 15 percent to Rs 105 per sq ft, while Bengaluru’s rents rose by 7 percent to Rs 100.6 per sq ft.
Pune’s average monthly office rent climbed 5 percent to Rs 80.9 per sq ft. In Hyderabad and Chennai, the averages increased by 8 percent, reaching Rs 77.5 and Rs 74.5 per sq ft, respectively. Kolkata experienced a notable 15 percent growth to Rs 48.3 per sq ft. Meanwhile, Ahmedabad’s average rent rose by 2 percent to Rs 45 per sq ft during this period.
On the demand front, leasing activity hit a record 29.9 million sq ft across these cities in Q1 2026, up 6 percent compared to the previous year. “A total of 14 million sq ft of new space was delivered in these cities, a significant 154 percent increase year-on-year, yet still less than half the space leased during the quarter,” Knight Frank commented.
The report highlights that the imbalance between demand and supply persists, mainly as developers are focusing more on residential projects. “This ongoing disparity, evident since 2021, has tightened market conditions significantly, reducing vacancy rates from 17.2 percent in 2021 to just 13.9 percent in Q1 2026,” Knight Frank added.
In India, the number of real estate companies focused on office development for lease is limited due to high capital expenditures. Noteworthy developers include DLF Ltd, Tata Realty & Infrastructure Ltd, K Raheja Group, Embassy Group, Sattva Group, and others.
Additionally, four Real Estate Investment Trusts (REITs) hold substantial office space portfolios: Knowledge Realty Trust, Embassy Office Parks REIT, Mindspace Business Parks REIT, and Brookfield India Real Estate Trust.
In Delhi-NCR, Signature Global has partnered with RMZ Group to create an office complex in Gurugram, while Gaurs Group plans to develop significant office assets along the Noida Expressway.
