Bengaluru Office Rents Match Tokyo With 11.5% Growth in Q3

Bengaluru Leads India’s Office Rent Gains as Leasing Slows

Prime office rents are rising even as leasing volumes retreat, highlighting a market increasingly shaped by location and asset quality.

Bengaluru’s rental growth stands apart

Bengaluru’s 11.5% annual increase in prime office rents was the strongest of the three Indian markets covered in Knight Frank’s Asia-Pacific office report. Delhi-NCR recorded growth of 5.4%, while Mumbai’s rents rose 4%. The difference suggests that rental momentum is not uniform across India’s major office centres, even as each market benefits from demand for well-located, higher-quality buildings.

The report puts Bengaluru’s prime rent at ₹2,015 per sq ft per annum, compared with ₹4,428 in Delhi-NCR and ₹4,111 in Mumbai. Bengaluru therefore combines the fastest rent growth with the lowest quoted prime rental rate among the three. That gap matters for occupiers weighing the cost of office space, although rental rates alone do not capture the full cost of occupying a property.

Rising rents meet weaker leasing volumes

Across Bengaluru, Delhi-NCR and Mumbai, office leasing totalled 7.6 million sq ft, down 13.6% from a year earlier. At the same time, prime rents across the Indian markets rose by an average of 7.5%. The two measures tell different parts of the story: leasing tracks space taken up, while prime rents reflect pricing for sought-after office locations and buildings.

Global capability centres, flexible workspace operators and domestic occupiers were the main sources of demand, helping offset weaker activity from third-party IT services firms. This mix may support select properties even when aggregate leasing is subdued. For landlords, the figures point to the importance of attracting active occupier segments; for businesses seeking space, a rising prime-rent benchmark could make location and cost trade-offs more consequential.

Occupancy costs change the city comparison

The total occupancy-cost comparison places Delhi-NCR and Mumbai above Bengaluru. Delhi-NCR ranked seventh among the markets studied, at $73.11, or ₹6,965, per sq ft per annum. Mumbai ranked eighth at $68.39, or ₹6,514. Bengaluru’s occupancy cost was $37.16, or ₹3,539, making it one of the more affordable office markets in the regional comparison.

Vacancy rates were 13.4% in Bengaluru, 14.5% in Delhi-NCR and 15.2% in Mumbai. These figures offer another lens on the market, but do not by themselves establish how much available space is suitable for a particular occupier. The report’s comparison reinforces that rental growth, occupancy costs and vacancy should be assessed together rather than treated as interchangeable measures.

A selective signal for India’s office sector

Across Asia-Pacific, prime office rents increased 1% quarter on quarter. That regional figure uses a different period and should not be directly compared with India’s annual rental growth. Still, the broader report places Bengaluru alongside Tokyo in the quarter’s year-on-year prime-rent rankings, while showing that Indian cities vary sharply in both cost and rental momentum.

For the sector, the combination of rent increases and lower leasing is a reason to look beyond headline growth. The durability of rental gains may depend on whether demand from the occupier groups supporting activity can continue to absorb prime space. The reported figures do not resolve that question, but they highlight why city-level and property-level conditions matter in assessing India’s office market.

Key Highlights

• Bengaluru prime office rents rose 11.5% year on year, matching Tokyo.
• Delhi-NCR rents increased 5.4%, while Mumbai recorded 4% growth.
• Leasing across the three Indian markets fell 13.6% year on year to 7.6 million sq ft.
• Prime rents across the Indian markets rose by an average of 7.5%.
• Bengaluru had the lowest reported occupancy cost and vacancy rate among the three Indian markets.

Investor Note: The report points to a mixed office-market picture: prime rents are advancing, but leasing volumes have weakened. Investors assessing real estate exposure should distinguish between rental growth in selected locations and the broader pace of occupier demand, while recognising that the supplied data alone does not establish future performance.