Mumbai’s Grade A Office Market Poised for Stronger Growth in H2

Mumbai’s Office Market Outlook Brightens

Mumbai’s Grade A office market is gearing up for renewed momentum in the second half of 2025. According to JLL, several occupiers are in the final stages of closing deals, driven by the delayed completion of high-quality projects in core submarkets. This trend is expected to lift demand, keeping the market dynamic despite a robust supply pipeline.

“Even with strong supply additions, healthy net absorption should help maintain stable vacancy. Occupiers are likely to remain flexible, balancing premium spaces with cost-effective options and adjusting lease structures as per evolving needs,” the report highlighted.

Leasing Trends and Absorption

Gross leasing in Q2 2025 stood at 2.29 million sq ft, marking a 14.9% dip quarter-on-quarter. Domestic occupiers led activity, with Navi Mumbai, SBD North, and SBD BKC being the most active hubs. Quarterly net absorption came in at 1.25 million sq ft, down 10% q-o-q. Notably, SBD North accounted for 41% of this demand, with significant deals by ICICI Lombard and Zomato.

Vacancy Levels Hit Record Low

Despite 1.12 million sq ft of new supply entering the market—primarily in SBD North and Navi Mumbai—vacancy fell to a record low of 11.7% citywide. Many completions included pre-committed spaces, underscoring sustained occupier confidence. Compared to last year, the vacancy rate slipped 17 basis points, reflecting tightened market dynamics.

Rents and Capital Values Rise

Rents climbed 0.9% q-o-q and 5.8% y-o-y, with Eastern Suburbs, SBD North, and SBD BKC showing the sharpest gains. However, capital values outpaced rental growth, reinforcing Mumbai’s appeal to investors seeking both capital appreciation and steady rental yields. The strong appetite signals confidence in Mumbai’s office sector resilience.