Leasing activity hits a six-year high in 2025

• Leasing activity recorded 4.16 million sq ft in Q4 2025 with ~71% increase q-o-q and 11.59 million sq ft for the full year, which was up 13% y-o-y and at an all-time high. Leasing activity in Q4 was dominated by flex operators followed by IT/ITeS and BFSI.
• Net absorption was down 11% y-o-y, primarily due to project delivery delays rather than weak demand, with pre-leasing commitments in such delayed completions indicating that absorption would have matched prior year levels with on-time completions.

Vacancy levels hold steady

• The quarter witnessed completion of ~1.8 million sq ft, which was recorded in the SBD North and Eastern Suburbs submarkets. Both the projects witnessed leasing on completion and are likely to be fully occupied in the coming quarters.
• New supply totaled 5.1 million sq ft in 2025, a 32% y-o-y decline due to delayed project deliveries that would have also significantly boosted net absorption given their existing pre-leasing commitments.

Rents and capital values continue to show growth momentum across all submarkets

• Overall rents rose by 1.1% q-o-q and ~4% y-o-y, with SBD North leading the rental growth q-o-q followed by SBD Central and Navi Mumbai, driven by the strong leasing momentum and tightening vacancies in prime projects in these submarkets.
• Faster appreciation in property values compared to rents ensured the market remained attractive for investors targeting both capital growth and reliable rental income.

Outlook: Flight to quality to define Mumbai’s landlord favourable office market

• Robust leasing, led by domestic firms and GCCs is likely to face constrained Grade A supply in the short-term. This imbalance is expected to tighten vacancy in prime micro-markets and drive rental appreciation, giving landlords pricing power.
• Occupiers and investors will prioritize premium, ESG-compliant buildings. With the flexible workspaces trend continuing to gain strength, these two are likely to be key forces driving occupier demand which is being reshaped by the improving infrastructure in the city.