Mumbai has emerged as one of Asia-Pacific’s most resilient real estate markets in Q1 2025, with stable capitalization (cap) rates and strong leasing activity across office, retail, and industrial sectors, according to the latest Colliers APAC Cap Rates Report.
Despite cautious investor sentiment across the region, driven by global macroeconomic uncertainties, Mumbai and Bengaluru stood out for their steady cap rates and robust fundamentals.
Mumbai Office Market Shows Strength
- Office leasing in Mumbai rose by 24% year-on-year, reflecting strong demand for quality commercial space.
- Despite global slowdown concerns, cap rates in Mumbai’s office segment remained stable in the range of 7.50% to 8.50%.
- The limited new supply helped drive higher rental growth and occupancy, signaling confidence in long-term office demand.
Retail Market: Capital Values Outpace Rents
- Mumbai’s retail sector saw capital values rise faster than rental income, suggesting investor optimism.
- The opening of three new malls in 2025 is expected to stabilize rents and moderate capital appreciation in the coming quarters.
- Bengaluru mirrored this trend with strong high-street activity.
Industrial Market Maintains Momentum
- Industrial cap rates in Mumbai remained in the 7.00% to 8.00% band, supported by demand from e-commerce and third-party logistics players.
- Bengaluru continued to draw investor attention with its position as a tech-logistics hub, further reinforcing India’s industrial growth story.
Cap Rate Snapshot – India (Q1 2025)
| Asset Class | Mumbai Cap Rate Range |
|---|---|
| Office | 7.50% – 8.50% |
| Retail | 7.50% – 8.00% |
| Industrial | 7.00% – 8.00% |
- India Lending Rate: 9.65%
- India Inflation Rate: 3.66%
Investor Caution, but India Holds Appeal
While capital flows across Asia-Pacific were conservative due to delayed global rate cuts, India stood out for its relative economic stability and property market fundamentals. Cap rates in most APAC cities remained flat, with Mumbai holding steady amid regional volatility.
According to Colliers, cities like Mumbai are benefiting from a combination of limited supply, growing demand, and investor confidence, making them ideal for long-term real estate exposure in the region.
Also Read: Coworking Share in Office Real Estate at 27%
