Delhi-NCR among APAC's top office markets as prime rents rise 5.4%; occupancy costs rank seventh

Delhi-NCR is strengthening its position as one of the Asia-Pacific region's key office markets, with prime office rents rising 5.4% year-on-year in Q3 2026, placing the region eighth among 24 major APAC markets tracked by Knight Frank.

The National Capital Region's growing prominence is also reflected in its occupancy costs. At $73.11 per sq ft per annum, Delhi-NCR ranked as the seventh-most expensive prime office market in the Asia-Pacific region, ahead of several established global business centres.

According to Knight Frank's Asia-Pacific Research, Office Markets – Q3 2026 report, Delhi-NCR's prime rents stood at ₹4,428 per sq ft per annum during the September quarter. While rents remained unchanged on a quarter-on-quarter basis, the annual growth highlights the continued demand for quality office space in the region. Vacancy stood at 14.5% at the end of Q3 2026.

Delhi-NCR makes it to APAC's top 10 for rental growth

The report placed Delhi-NCR's Connaught Place market at eighth position in the APAC rankings for prime office rental growth, with a 5.4% year-on-year increase.

The region ranked ahead of markets such as Seoul, Perth and Mumbai, although Bengaluru emerged as India's strongest performer with 11.5% annual rental growth.

At the top of the APAC table was Hong Kong SAR, where prime office rents rose 17.1% year-on-year, followed by Brisbane at 12.1%. Tokyo and Bengaluru both recorded 11.5% growth. Delhi-NCR's position in the top 10 underlines the strength of its established commercial districts in a region where several major markets continue to face rental pressure.

One of the region's most expensive office markets

Delhi-NCR's office market is not only seeing rental growth but is also among the costliest locations for prime occupiers in Asia-Pacific.

With occupancy costs of $73.11 per sq ft per annum, Delhi-NCR ranked seventh in the region. It was behind Hong Kong SAR, Singapore, Sydney, Seoul and Tokyo, but ahead of Mumbai, Melbourne and Perth.

Mumbai's occupancy cost stood at $68.39 per sq ft per annum, while Bengaluru was significantly lower at $37.16, highlighting the premium attached to established business centres such as Delhi-NCR.

Quality and location continue to command a premium

The broader Indian office market continued to see resilient demand for quality assets, even as leasing activity varied across key cities.

Office leasing across Bengaluru, Mumbai and Delhi-NCR totalled 7.6 million sq ft in Q3 2026, down 13.6% from a year earlier. However, prime rents across the three markets rose by an average of 7.5% annually.

Demand was driven largely by global capability centres, flexible workspace operators and domestic occupiers, helping offset relatively weaker activity from third-party IT services companies.

According to Knight Frank, the ability of prime offices to command higher rents reflects the premium businesses are placing on quality and location. This trend could be particularly important for mature office markets such as Delhi-NCR, where occupiers increasingly weigh workplace quality alongside broader business and talent requirements.

What it means for Delhi-NCR

The latest data suggests that Delhi-NCR continues to command a strong position in the regional office landscape. While quarterly rental growth was flat, the 5.4% annual increase, combined with its ranking as the seventh-most expensive prime office market in APAC, points to the depth and maturity of the market.

For investors and developers, the key trend is clear: the premium for well-located, high-quality office assets remains intact.

As companies continue to reassess their workplace strategies amid investments in technology and digital transformation, office real estate is increasingly being evaluated not just as a cost, but also for its contribution to productivity, innovation and business performance.

For Delhi-NCR, maintaining this position will depend on its ability to meet the evolving demand for high-quality, strategically located and future-ready office spaces.

(Disclaimer: Recommendations, suggestions, views, and opinions given by experts are their own. These do not represent the views of the Economic Times)