Mumbai Office Market Scores 11% Year-on-Year Rent Growth Thanks to Continued High Demand
Mumbai's commercial sector continues to grow as average rents rise 11% over the previous year, marking the thirteenth quarter in a row of constant or rising rates. This is according to Knight Frank India's Q3 2025 report. Developers are focusing on completing projects while holding back on new launches, driving this upward trend in key areas.
Forces Driving the Rent Increase
The demand remains strong for top-tier Grade A office spaces especially in busy places like Nariman Point, Lower Parel, and Bandra-Kurla Complex. Global Capability Centres (GCCs) are at the forefront, their market share tripled in 2025, leveraging Mumbai's extensive talent pool for analytics and services, according to Gulam Zia of Knight Frank.
Even though overall leasing dipped by 5% to 9.8 million sq ft per year, this is Mumbai's second-best year in over a decade. Vacancies have stayed the same at 18.3%, thanks to a 12% drop in new supply. Nationally, office leasing hit a record 86.4 million sq ft, up 20% YoY, with rents rising in all cities, Mumbai rents increased by 6-11% depending on the period.
Main Points to Note
- Leasing Volumes: H2 2025 saw about 4.3 million sq ft taken up, showing a mature, active market.
- Supply Dynamics: New completions dropped, creating a difference that raises rents, India-wide supply increased just 9% to 54.8 million sq ft.
- Focus of Occupiers: Over 90% of deals target Grade A assets for reliability and efficiency.
- GCC Growth: They grabbed 38% of national leasing, drawn by the skilled workforce.
Implications for Stakeholders
Tenants seek high-value locations, pushing developers to finish off existing properties rather than investing in new builds in a cautious market. Investors are focusing on steady returns as the deep demand, from families looking for housing to companies in offices, supports Mumbai's leading role. Looking ahead, limited new supply expected in 2026 indicates continued rental strength despite international uncertainties.
This resilience highlights Mumbai's appeal as India's commercial leader. Companies commit long-term; the city provides.