The rise cements Mumbai’s position as India’s second-fastest growing office rental market, after Kolkata. Despite a drop in leasing volumes, demand for premium Grade A spaces remains strong — indicating that companies are willing to pay a premium to be in key business districts.

Mumbai Office Market Snapshot – Q3 2025

• Average rent growth: +11% YoY
• New office completions: 1.6 mn sq ft (up 94% YoY)
• Leasing volumes: 1.9 mn sq ft transacted (down 27% YoY)
• Ranking: Second only to Kolkata in rental growth

How Mumbai Compares with Other Cities

Year-on-Year Office Rent Growth (Q3 2025):

• Kolkata: +14%
• Mumbai: +11%
• NCR & Hyderabad: +9% each
• Bengaluru: +6%
• Ahmedabad: +5%
• Pune: +4%
• Chennai: +1%

Mumbai is outperforming most major metros, reflecting the city’s enduring commercial magnetism.

Leasing Activity: Mumbai Holds Its Own

While Mumbai’s transaction volumes dipped by 27% YoY, the city remains one of India’s three largest office markets along with Bengaluru and NCR — together accounting for 50% of all leasing activity in the country.

Transaction Volumes (mn sq ft):

• Bengaluru: 4.2 (↓ 21% YoY)
• Hyderabad: 2.9 (↑ 33% YoY)
• Chennai: 2.8 (↑ 9% YoY)
• NCR: 2.7 (↓ 15% YoY)
• Mumbai: 1.9 (↓ 27% YoY)
• Kolkata: 0.5 (↑ 190% YoY)
• Ahmedabad: 0.4 (↓ 13% YoY)

Even with a dip, Mumbai remains a heavyweight in India’s office leasing landscape.

New Supply: Developers Step on the Gas

After several quarters of lag, new office supply in Mumbai jumped by 94% YoY, reaching 1.6 mn sq ft in Q3 2025. This comes as developers attempt to catch up with pent-up demand for Grade A spaces, which has been pushing rents upward.

New Office Completions (mn sq ft):

• Bengaluru: 5.9 (↑ 140%)
• Mumbai: 1.6 (↑ 94%)
• NCR: 1.5 (↑ 42%)
• Chennai: 0.4 (↑ 1709%)
• Hyderabad: 1.4 (↓ 61%)
• Pune: 1.1 (↓ 60%)

Meanwhile, Residential Market Stays Hot

Mumbai isn’t just leading in commercial real estate. It also topped India’s home sales charts in Q3 2025:

• 24,706 homes sold, the highest among all cities
• Home prices rose 7% YoY, driven by demand in premium segments (₹1 crore+)
• New launches dipped 19% YoY to 19,145 units as developers focused on delivery rather than aggressive expansion

What It Means for Businesses and Workers

For companies, these rising rents could significantly increase operational costs, particularly for startups and mid-sized firms in premium locations. Many may turn to emerging suburban micro-markets or co-working solutions to balance cost and quality.

For professionals, working in Mumbai could become more expensive indirectly through higher corporate overheads, commuting costs, and housing expenses near commercial hubs.

Bigger Picture

Mumbai’s real estate market is at an inflection point — strong residential demand, surging commercial rents, and accelerating new supply all point to a maturing, resilient urban economy. The city continues to attract occupiers and investors alike, even as competition among metros intensifies.

Also Read: Maharashtra’s New GCC Push Set to Energise Office Leasing Beyond Mumbai & Pune

The post 📰 Working in Mumbai Just Got Costlier: Office Rents Jump 11% appeared first on Square Feat India.

Snapshot: India’s REITable Office Market (Top 7 Cities)

Southern Cities Lead in Stock, But Lag in Listings

The southern markets—Bengaluru, Hyderabad, and Chennai—collectively host the largest chunk (approx. 313 Mn sq. ft.) of REIT-suitable office stock. However, only 18% of this is currently part of listed REIT portfolios.

City-Wise Breakdown: REIT-able vs. Listed Stock

Kolkata leads in percentage terms, with 43% of its 7 Mn sq. ft. REITable stock already listed.

Why the Spike in REITable Stock?

The 36% surge in REITable stock from 2023 to 2025 has been driven by two key factors:

• New Supply Addition: About 106.4 Mn sq. ft. of Grade A office stock has been added across top 7 cities since 2023.
• Upgradation of Aging Assets: Nearly 400 Mn sq. ft. of existing stock (older than 10 years) is suitable for conversion to REIT standards.

Key Quote:

“The listed Indian REITs currently manage only a fraction of the total REITable market. This opens massive opportunities for new listings and consolidation,”
— Anuj Puri, Chairman, ANAROCK Group

Investor Returns Show Robust REIT Performance

India’s REITs are not just expanding in footprint—they’re also delivering strong returns.

1-Year Returns of Listed REITs (as of 16 June 2025):

Mindspace REIT has been the top performer, driven by strong leasing activity and rental escalations.

What Lies Ahead?

India’s REIT journey is still in its early phase, but the potential is vast:

• 47% of Grade A stock can be upgraded to REIT quality.
• Opportunity to increase rental yields by 10–30% through upgradation.
• Expansion into tier-2 cities and mixed-use assets may open new frontiers.

Quick Facts Box: Indian REIT Market

• Launched: 2019
• Total Listed Stock: 117.2 Mn sq. ft.
• REITs in India: 3 (Embassy, Mindspace, Brookfield)
• Top City by Stock: Bengaluru (162 Mn sq. ft.)
• Top City by Listing %: Kolkata (43%)
• Total REITable Office Market: 520 Mn sq. ft.
• Total Grade A Office Stock: 850 Mn sq. ft.

Conclusion

India’s REIT ecosystem is growing steadily but still under-leveraged. With only one-fourth of REIT-suitable stock currently listed, there is massive untapped potential waiting to be unlocked—especially in southern and western markets. As investors seek yield-driven, stable instruments, REITs are set to gain more traction in the years ahead.

Also Read: Data Benchmarking Institutions Launched to Empower Indian REIT Investors

The post India’s Office REIT Market Sees Big Headroom: Only 23% of 520 Mn sq. ft. Listed So Far appeared first on Square Feat India.