As other areas of Asia and the Asia-Pacific region struggle with their economies and markets, India’s real estate is proving to be “oasis,” or, in other words, a place where many investors are finding comfort. The most recent Knight Frank Asia Pacific Outlook identifies India as having some of the best long-term property investment opportunities, and this view is supported by facts and figures.
What are the underlying reasons for Knight Frank’s positive view on India? Knight Frank cites strong domestic fundamentals, which include a large pool of qualified workers attracting Global Competency Centres (GCCs), strong tech-sector hiring activity, and a growing number of institutional investors and landlords. The combination of these factors produced some of the highest levels of office leasing activity in the Asia-Pacific region in 2025, indicating that the demand for quality office space is not only recovering but also increasing.
The headlines grab attention. In 2025, Grade A office space surpassed 1 billion sq ft in the top 8 cities of India, reflecting the growth of India’s commercial real estate market, which has undergone significant changes over the past 20 years. In the mid-2000s, the total amount of commercial real estate in India was 200 million sq ft, and now it has grown to over 1 billion sq ft. This development illustrates the shift in India’s commercial real estate market from an early stage to full maturity.
Bengaluru, Mumbai, and the National Capital Region (NCR) continue to be the main three metropolitan areas for Grade A office space and account for a large percentage of all lease transactions in India, with higher future growth rates for rents than the other five major office markets (Bengaluru, Mumbai, NCR, Chennai, and Hyderabad). According to Knight Frank, the projected future rent growths of Grade A office rents in these three metropolitan areas are projected to be between 7.5% and 9% annually.
More than just the requirement for square footage, tenants are seeking modern buildings that are environmentally conscientious, have better employee interaction, provide energy-efficient systems, provide better natural daylighting, and provide more recently developed building systems, such as HVAC systems and intelligent working technologies. With these increased asks, landlords are willing to provide rent increases to the level of the product.
The change in the market has forced landlords to adopt a different business approach for their properties. Older properties built in the early 2000s are being renovated or replaced with new construction; developers are now focusing on obtaining sustainability certifications, creating flexible floor plates, and including wellness features to attract and retain high-end tenants.
Now, the focus of the Office, Multi-Family, and other Alternative Real Estate Classes is shifting from quantity to quality, resulting in higher effective rents being charged for space despite the increased demands of occupiers to have more flexibility.
As a result, investors have begun to take notice of this trend, as an increase in institutional investors providing real estate credit and REIT activity has created additional connections between the office, multi-family, and alternative real estate classes to create more liquid investment channels. Analysts view real estate as developing into a yield-orientated alternative to equities and bonds. The current trend toward low growth and cautious capital flows will make real estate an attractive option for investors.
The growth that India is experiencing has not come about by accident, according to leaders of the industry who believe that the country’s growth has been planned. Affordability, regulatory clarity, and depth of talent are three reasons why Shishir Baijal is from Knight Frank. India considers India to be “a strategic growth destination for global occupiers”. Global occupiers continue to invest in India even though investment into other countries is slowing down because they recognise the advantages offered by India.
However, the growth that India is currently experiencing will not continue without obstacles. In 2026, the Asia-Pacific region will continue to experience slower growth, the introduction of new trade policies, and continued uncertainty regarding the economic climate. As such, investors will be forced to look for investments that offer value and resilience rather than just attractive yields. Therefore, India must continue to supply a disciplined supply chain, provide an upgrade to infrastructure and develop new buildings that offer a sustainable solution and flexibility for their occupiers. According to Knight Frank, 2021 will be a year of recalibration where markets that create the necessary conditions for sustainable activity will prosper.
India will develop a sustainable structure of growth in 2026 according to factors such as matching talent to products and services in a global hybrid workforce and therefore aligning by design rather than happenstance through policy-making by the government. For those who are interested in the Asia Pacific investment sector, India has transitioned from being a speculative location to that of a region with a sustainable structure worth attention for ongoing structural change.
