Asia-Pacific’s office markets demonstrated resilience in Q2 2026, with prime office rents increasing by 0.6% quarter-on-quarter, according to Knight Frank’s latest report. Despite the addition of nearly 1.5 million square metres of new office space, vacancy rates remained stable, with 18 out of 24 cities experiencing stable or rising rents. This trend highlights the sustained demand for high-quality, well-located office spaces.
Hong Kong SAR led the major office markets, with prime rents surging 12.7% year-on-year and 5.1% quarter-on-quarter, driven by limited prime space availability in Central and a resurgence in demand from businesses re-establishing their presence in core districts. Meanwhile, Phnom Penh in Southeast Asia saw the strongest quarterly rental growth at 7.6%, thanks to new Grade A developments.
India also showed robust activity, with 9.8 million square feet leased during the quarter, surpassing the 7 million square feet of new supply. The demand was particularly strong for flexible workspace solutions, with technology companies, especially AI-related firms, leading the charge. These companies are increasingly opting for newer, well-connected buildings to support expansion and talent acquisition.
Tim Armstrong, Global Head of Occupier Strategies and Solutions at Knight Frank, noted, “Occupiers are entering a new phase of decision-making as tightening supply makes securing the right space in the right location increasingly challenging.” Christine Li, Head of Research for Knight Frank Asia-Pacific, added that the rise in rents reflects a gradual market rebalancing, with financial institutions, technology occupiers, and flex space operators supporting leasing activity.
Looking ahead, supply constraints and sector-specific expansions are expected to drive further rental growth in the latter half of 2026, with AI-related occupiers playing a significant role in the region’s leasing activity.
