Delhi-NCR, Bengaluru office rentals cross Rs 100/sq ft/month milestone: Knight Frank

New Delhi: Average monthly rentals for prime office spaces in Bengaluru and Delhi-NCR have crossed Rs 100 per sq ft mark for the first time as demand for prime workspaces exceeds supply, according to Knight Frank data.

In Mumbai, the average office rentals are already above Rs 100 per sq ft.

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Real estate consultant Knight Frank data showed that the average rentals for office spaces rose in a range of 2-15 per cent during January-March 2026 across eight major cities of India compared to the same period last year.

The maximum annual growth of 15 per cent in office rent was seen in Delhi-NCR and Kolkata.

"The supply constraints across key markets have supported a sustained rental upcycle since early 2022...," the consultant said in its latest Q1 (January-March) 2026 report on the Indian office market.

The report mentioned that rental growth remained positive in Q1 2026, ranging between 2 per cent and 15 per cent YoY (year-on-year) across cities.

"Notably, NCR and Bengaluru breached an average rent of Rs 100 per sq ft for the first time," Knight Frank said.

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As per the data, the average monthly office rent in Mumbai rose 6 per cent annually in January-March to Rs 125 per sq ft.

In Delhi-NCR, the average office rentals rose 15 per cent to Rs 105 per sq ft a month.

Bengaluru's office rent increased 7 per cent annually in January-March to Rs 100.6 per sq ft per month.

The average monthly office rent in Pune went up 5 per cent to Rs 80.9 per sq ft a month.

In Hyderabad and Chennai, the monthly average rent increased 8 per cent to Rs 77.5 and Rs 74.5 per sq ft, respectively.

The rentals in Kolkata grew 15 per cent to Rs 48.3 per sq ft per month.

Lastly, Knight Frank data showed that the average monthly office rent in Ahmedabad grew 2 per cent annually to Rs 45 per sq ft during January-March.

On the demand-supply side, the leasing of office space hit a record 29.9 million square feet in January-March across these eight leading cities, an increase of 6 per cent from the year-ago period.

"A total of 14 million sq ft was delivered across the eight major cities in Q1 2026, reflecting a sharp 154 per cent YoY increase, but still amounting to less than half of the space leased or absorbed during the quarter," Knight Frank said.

The demand continues to outpace the office completions as developer focus remained skewed toward residential projects, the consultant pointed out.

"The persistent gap between supply and demand, evident since 2021, has steadily tightened market conditions. Vacancy levels have compressed from 17.2 per cent in 2021 to a considerably lower 13.9 per cent in Q1,2026," Knight Frank said.

In India, there are a limited number of real estate companies engaged in the development of office spaces for leasing purposes due to high capital expenditure.

Some of the prominent developers include India's largest realty firm DLF Ltd, Tata Realty & Infrastructure Ltd, K Raheja Group, Embassy Group, Sattva Group, RMZ group, Hiranandani Group, Brigade Group, Panchshil Realty, Bharti Realty and Wadhwa group.

That apart, there are four Real Estate Investment Trusts (REITs) which own a large portfolio of office spaces. These are Sattva Group and Blackstone sponsored Knowledge Realty Trust, Embassy Office Parks REIT, K Raheja group backed Mindspace Business Parks REIT and Brookfield India Real Estate Trust.

In Delhi-NCR, Signature Global has formed a joint venture with Bengaluru-based RMZ group to build an office complex in Gurugram. Gaurs Group is also planning to develop a large office assets on Noida Expressway.