India's office market has emerged as a remarkable outlier in the region. While most Asia-Pacific markets struggle with the fallout from trade tensions and supply chain disruptions, India has quietly consolidated its position as the region's dominant force in office leasing. 

According to Knight Frank's Horizon Report, "From Whiplash to Resilience: Corporate Real Estate in the New World Order”, India accounts for 47% of all office leasing activity across Asia-Pacific, a sharp rise from 36% in 2015, representing a clear structural shift in regional commercial real estate dynamics. 

The numbers behind India's dominance 

The scale of India's office market growth is difficult to overstate. In 2024, India recorded 6.68 million square meters of office transactions, a record-breaking figure that signifies the market's exceptional momentum despite global economic headwinds. This growth stands in stark contrast to other traditional office powerhouses in the region. 

India's office sector has not only maintained stability but also accelerated its growth trajectory. This pattern challenges the conventional wisdom that office markets rise and fall with regional economic conditions, suggesting that something more fundamental is driving India's divergent performance. 


Structural drivers behind India's office market strength
 

The rise of India's office market isn't primarily driven by cyclical factors or short-term policy shifts. Rather, it reflects a convergence of structural advantages that have positioned India as a relatively safe haven amid regional uncertainty: 

1. Talent depth and scale 

India produces approximately 1.5 million engineering graduates annually, more than the United States and the Chinese mainland combined. This talent pipeline has become increasingly valuable as companies prioritize access to qualified STEM talent in their location decisions. 

This talent advantage has become even more significant as technology companies face increasing restrictions on talent mobility between the US and the Chinese mainland, making India an attractive alternative for building specialized technical teams at scale. 

2. The GCC evolution: From cost arbitrage to strategic value 

Global Capability Centres (GCCs), the captive operations of multinational corporations, have evolved dramatically from their early days as basic business process outsourcing hubs. Today's GCCs represent a fundamental shift in how global companies structure their operations, with many housing mission-critical functions and innovation centres. 

India hosts over 1,500 GCCs employing more than 1.3 million professionals, and these operations have been a primary driver of premium office absorption.  

3. Domestic growth engine and economic fundamentals 

While much attention focuses on India's role in global supply chains, domestic economic fundamentals provide a crucial foundation for office market strength. India's GDP growth rate of 6.8% in 2024 outpaced all major economies, creating substantial demand from domestic companies expanding their footprints. 

Additionally, India's relative insulation from direct US tariff impacts has provided stability during trade volatility. Unlike export-dependent economies, India's domestic consumption-driven growth model offers a degree of shelter from the immediate effects of protectionist policies. 

Looking forward: Sustainability of the growth trajectory 

The critical question for investors and occupiers is whether India can sustain its exceptional market performance as regional competitors adjust to the new trade landscape. Several factors will shape the market's trajectory over the next 3 to 5 years: 

Challenges to navigate 
  • Infrastructure constraints: Despite significant improvements, infrastructure remains a limiting factor in some markets, creating bottlenecks that could slow absorption. 
  • Rental growth pressure: In prime submarkets like Bengaluru CBD and Mumbai BKC, rental increases have outpaced inflation, raising questions about affordability and competitiveness. 
  • Competition from regional alternatives: As markets such as Vietnam and Indonesia develop more sophisticated office stock, they could capture a portion of footprint growth that might otherwise flow to India. 
  • Geopolitical calculations: India's complicated relationships with the US and the Chinese mainland create potential for policy shifts that could impact investment flows. 

For more insights, please download the latest edition of Knight Frank’s Asia-Pacific Horizon series, Whiplash to Resilience: Corporate Real Estate in the New World Order, report below.

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Christine Li

Head of Research, Asia Pacific