APAC prime office rents decline by 1.4% in Q3

This was driven by the flatlined rental growth in Southeast Asia.

Prime office rents across Asia-Pacific fell 1.4% year-on-year in the third quarter of 2025, as rental growth lost momentum and stalled at 0.0% quarter-on-quarter, down from 0.2% growth in Q2, according to Knight Frank's latest Office Highlights report.

The steeper declines in Chinese mainland markets and flatlined rental growth in Southeast Asia offset continued strength in Australia and India, said the report, 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, says, "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.”

Here’s more from Knight Frank:

India counters regional trend with leasing volumes set for a record year
Despite vacancies rising from the delivery of close to 9 million square feet of new supply, rents across India's three largest office markets—Bengaluru, Delhi-NCR and Mumbai—still rose an average of 1.7% quarter-on-quarter.

Leasing momentum has remained strong, with 8.8 million square feet transacted in Q3 alone. Full-year leasing volumes are expected to reach nearly 50 million sq ft, surpassing the previous 41 million sq ft set in 2024. This growth has been driven by sustained commitments from Global Capability Centers (GCCs) and a revival in third-party IT services.

Australia maintains growth momentum
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.

Tech and finance dominate leasing activity
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, adds: "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.”

Outlook: cautious but quality-focused
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.