Neel AcharyMumbai, 24th October, 2025: According to Knight Frank’s Asia-Pacific Office Highlights Q3 2025 report, India’s office market continues to outshine the Asia-Pacific region, defying broader slowdown trends to remain one of the region’s most resilient performers. Leasing momentum has remained robust, with 8.8 mn sq ft transacted in the third quarter alone. Full-year leasing volumes of Bengaluru, NCR and Mumbai together, are expected to touch 50 mn sq ft, surpassing the previous record of 41 mn sq ft set in 2024. The surge is fuelled by sustained leasing commitments from Global Capability Centres (GCCs) and a revival in third-party IT services, highlighting India’s attractiveness as a global business hub.
Despite a supply influx of nearly 9 mn square feet during the quarter, prime office rents across India’s three largest office markets- Bengaluru, NCR, and Mumbai rose an average of 4.3% YoY, highlighting the market’s enduring strength.
APAC Prime Rental Rate Growth Q3 2025
In comparison, several Asia-Pacific markets saw muted rental growth as landlords prioritised occupancy amid elevated vacancies. India’s strong performance reflects a resilient occupier base, a diversified tenant profile, and a stable economic outlook.
According to the report, India’s prime rents increased 4.3% YoY on average across the three major cities. Bengaluru remained the most dynamic market, posting 2% QoQ growth and 8.8% YoY, with strong take-up in emerging corridors such as Outer Ring Road and Whitefield. Delhi-NCR followed with 2% QoQ and 3% YoY growth, while Mumbai recorded 2% QoQ and 3.9% YoY.
The vacancy rate edged up marginally due to the new completions but remains in check at 11.5% in Bengaluru, 12.5% in Delhi-NCR, and 17.3% in Mumbai. Developers and landlords continued to focus on quality-driven supply, aligning with occupiers’ preference for future-ready, sustainable spaces.
Regionwide, landlords faced pressure from a strong construction pipeline, lifting vacancies across major markets. Despite that, demand for premium spaces remained strong, reflecting the ongoing flight-to-quality trend across Asia-Pacific.
Knight Frank expects India’s office market to maintain steady rental growth through 2026, supported by sustained economic fundamentals, government-led digital initiatives, and the expansion of GCCs across Tier-I and emerging Tier-II cities.
Shishir Baijal, Chairman and Managing Director, Knight Frank India, said, “India’s office market continues to stand out as a beacon of of stability and long-term potential amid regional uncertainty. The strong leasing activity highlights its growing importance in global business strategies. Continued interest from GCCs and renewed activity in the IT sector point to India’s deep talent pool, improving infrastructure, and investor trust. As occupiers embrace flexible and hybrid work models, the Indian office landscape is evolving into a more dynamic, tech-driven ecosystem that will define the next phase of growth. ”
The report notes that India’s market dynamics contrast sharply with broader Asia-Pacific trends. Across the APAC region, prime office rents fell 1.4% YoY, with rental growth flatlining at 0.0% QoQ, down from 0.2% in Q2 2025. The steeper declines in Chinese mainland markets and flatlined rental growth in Southeast Asia offset continued strength in Australia and India, highlighting growing divergence across the region. The data shows 16 of 23 monitored cities reported stable or increasing rents year-on-year, down from 17 cities in Q2.
Tim Armstrong, Global Head, Occupier Strategy and solutions, Knight Frank, commented, “Occupier priorities have continued to evolve amid ongoing geopolitical and technological shifts. In this dynamic environment, organisations are prioritising space solutions that support higher density and maximise strategic value. The sustained demand for premium spaces is closely tied to broader business transformation agendas. In a climate defined by uncertainty, flexibility and resilience have become non-negotiable. Corporates are committing to new spaces, but with a clear emphasis on agility, embedding flexible lease terms and pre-let options to maintain responsiveness and mitigate risk.”
The office leasing market across tier-one cities in the Chinese mainland remained under pressure, with rental declines accelerating to 3.4% quarter-on-quarter, up from 2.9% in Q2 2025. Landlords continued to lower rents to raise occupancy amid a sustained supply pipeline, which delivered over 1.8 million square meters year-to-date through Q3 2025. However, Beijing showed early signs of stabilisation, with vacancy rates edging down slightly after no new supply was added for the second consecutive quarter.
Among the tier-one cities, Shenzhen faces the most acute challenges with a 26.1% vacancy rate, followed by Shanghai at 23.3%. In comparison, Beijing and Guangzhou show relatively better performance at 17.8% and 17.5% respectively, though both markets remain under pressure.
Prime rents across Australia’s office markets rose 5.5% year-on-year, with broad-based increases across all cities tracked. Brisbane continued to lead the region for annual rental growth, posting a 14.9% increase driven by sustained demand from professional services firms for premium office space. Melbourne posted the strongest quarterly growth, rising 5.3% year-on-year from 2.4% in Q2, with much of the momentum concentrated in the Eastern Core submarket, where availability of high-quality space remains tight.
Nearly half of the region’s significant leasing transactions came from the financial services and technology sectors, with professional services firms accounting for over 10% of major deals. The concentration of demand underscores the ongoing flight to quality across key markets.
Supported by a buoyant stock market, legal and financial groups from the Chinese mainland have been observed expanding their presence in Hong Kong SAR. Despite a sluggish economy, premium spaces in Hong Kong SAR saw an increase in new leases exceeding 10,000 square feet, with an insurance company committing to a 330,000 square foot space in Quarry Bay, the city’s largest lease so far this year.
Christine Li, Head of Research, Asia-Pacific at Knight Frank, said, “Although occupier markets in the region remained cautious, demand for new spaces has remained resilient as occupiers strive towards creating agile, data-informed ecosystems that flex with evolving needs. Technology is accelerating these evolving expectations, while the clustering of strategic functions in select districts continues to reinforce the divide between best-in-class assets and the rest. While this dynamic will continue to anchor resilient demand for high-quality office environments, occupiers must remain vigilant in anticipating market shifts and exploring pre-leasing opportunities in under-construction projects to secure future-ready spaces.”
Rental growth in the region will likely remain subdued amid strong construction deliveries over the past two years and the backfill space created. However, the flight to quality will continue to support demand for premium office space across key Asia-Pacific markets heading into 2026.
