Bengaluru annual office rents to rise by 4 to 4.5% until 2026

CBD rents are expected to increase by up to 7%.

In a recent report, JLL said around 15-15.5 million sq ft of office supply is expected in Bengaluru during 2025. 

Net absorption is likely to touch 13.0-14.0 million sq ft by end-2025, as the Bengaluru office market should continue to witness healthy demand from portfolio expansions and entry of new office occupiers.

Here’s more from JLL:

City rents are set to increase at an annual rate of 4.0-4.5% during 2025-2026. CBD rents are expected to rise the most (6-7%) y-o-y, followed by Whitefield. Bengaluru office market should continue as one of the most premium markets with high interest from investors.

Bengaluru tops India office market leasing for Q4 and full year 2024

Quarterly gross leasing volumes were the highest ever in Bengaluru, surpassing the previous record by 13%. On a q-o-q basis the GLV grew by ~61%, resulting in a record annual figure of ~22.0 million sq ft in 2024, 42% higher over 2023.

Quarterly net absorption of 6.9 million sq ft was also a record high, driven by fresh leasing and healthy pre-commitments in Q4 completions. Annual net absorption for 2024 hit 14.7 million sq ft, again the highest ever.

Healthy quarterly supply with ~40% pre-commitment restricts rise in vacancy

Quarterly completions of 4.4 million sq ft were up 41% q-o-q, with SBD submarket accounting for a 67%, while the remaining supply came up in Whitefield. The annual supply volume added up to around 13.0 million sq ft during 2024.

Despite healthy supply during Q4, vacancy levels dropped by 140 bps q-o-q, driven by strong leasing momentum and ~40% pre-commitment levels in the new supply. Vacancy stood at 11.9% at end-2024, the lowest in the last nine quarters.

Overall city level rents increased to INR 93.6 per sq ft, per month, recording a q-o-q rise of 2.6%

Office rents grew by 2.6% q-o-q and 5.6% y-o-y as prominent developers continued to offer spaces at much higher rents than the market average, particularly in prime submarkets witnessing tight vacancy levels and strong demand for space.

Overall capital values rose 3.2% q-o-q in Q4, while on a y-o-y basis they were up by 7.6%. Capital value trends in the city are on a steady growth curve as investors continue to show interest in Bengaluru’s prime office assets.