The average office rentals in Delhi NCR and Bengaluru have crossed the Rs 100 per square foot per month mark for the first time, driven by robust demand from IT and co-working spaces amid limited supply. This milestone reflects the growing commercial real estate activity in these key markets.
Reasons Behind the Rent Hike
According to a recent report by real estate consultancy firm Knight Frank India, the average monthly rent in Delhi NCR stood at Rs 101.2 per sq ft in the first quarter of 2026, while Bengaluru recorded Rs 103.5 per sq ft. The surge is attributed to increased leasing activity by technology companies, startups, and flexible workspace operators. Additionally, the limited availability of Grade A office space has pushed landlords to command higher rents.
Impact on Businesses
The rising office rentals are likely to increase operational costs for companies, especially small and medium enterprises (SMEs) and startups. Many firms are now exploring co-working spaces or relocating to peripheral areas to manage expenses. However, the trend also indicates a strong economic recovery and growing investor confidence in the Indian commercial real estate sector.
Market Outlook
Experts predict that office rentals may continue to rise in the near term due to sustained demand and new supply constraints. Developers are focusing on completing ongoing projects to meet the demand, but construction delays and rising material costs could further tighten supply. The vacancy rates in both cities have dropped to around 12-14%, the lowest in recent years.
- Delhi NCR: Average rent Rs 101.2/sq ft/month
- Bengaluru: Average rent Rs 103.5/sq ft/month
- Key drivers: IT sector, co-working spaces, limited Grade A supply
Commercial real estate stakeholders are closely monitoring the situation, with some expecting a moderation in rent growth if new supply enters the market by the end of 2026. Meanwhile, tenants are advised to negotiate longer leases to lock in current rates.
