Mumbai Grade A office demand to pick up in H2

Occupiers are balancing premium and affordable locations.

In a report, JLL analysts said they anticipate strong Grade A office space take-up in Mumbai in the near-term, as many occupiers are in the final stages of securing spaces, resulting from the delayed delivery of high-quality supply in core office submarkets.

“Even with a robust supply pipeline, the forecast for healthy net absorption should result in stable vacancy. Occupiers may continue to pursue flexible strategies, balancing premium and cost-effective locations with varied lease structures and evolving need,” the report added.

Here’s more from JLL:

Gross leasing reached 2.29 million sq ft, down 14.99% q-o-q, amid a period marked by slower decision-making. Leasing activity in Q2 2025 was primarily driven by domestic occupiers, with Navi Mumbai, SBD North and SBD BKC leading the charts.

Quarterly net absorption was 1.25 million sq ft, down 10% q-o-q. SBD North led net absorption with 41%, with key deals including ICICI Lombard and Zomato being significant ones for the submarket.

Record low vacancy despite healthy supply addition

The quarter saw 1.12 million sq ft of new supply, mainly in SBD North and Navi Mumbai. SBD North completions included pre-committed space, indicating sustained demand.

Vacancy fell to a record low of 11.7% citywide. Despite lower y-o-y net absorption, the vacancy rate decreased by 17 bps, reflecting tight market conditions.

Strong investor appetite drives capital value growth; rents moving up, too

Overall rents grew 0.9% q-o-q and 5.8% y-o-y, with Eastern Suburbs, SBD North and SBD BKC experiencing the largest quarterly gains.

Capital values outpaced rents, maintaining market appeal for investors targeting both capital appreciation and steady rental income.