Mumbai Dominates India's Real Estate Market in 2025; Office Leasing Soars

Mumbai has cemented its position as India's largest residential real estate market in 2025, while also witnessing the second-highest office leasing volume in more than a decade. This is according to the latest report by Knight Frank India, titled 'India Real Estate: Office and Residential Market, July-December 2025 (H2 2025).'

The report highlights that Mumbai concluded the year with 9.8 million square feet of office leasing, despite a 5% year-on-year decline. This makes 2025 the second-strongest year for commercial absorption in over ten years. Leasing activity in the second half of the year stood at 4.3 million square feet, driven by large-format transactions in scalable suburban locations.

Global Capability Centres (GCCs) emerged as the dominant demand driver, with their share of office leasing increasing sharply from 9% in H2 2024 to 27% in H2 2025. This growth was led by BFSI (Banking, Financial Services, and Insurance), technology, and engineering firms. India-facing occupiers remained the largest segment at 40%, although this was a significant drop from the 72% share recorded a year earlier. Third-party IT and ITeS firms also expanded their footprint, accounting for 20% of leasing, primarily in cost-efficient suburban hubs such as Andheri East, Goregaon, Airoli, and Thane.

Rental values continued to rise, with average transacted rents increasing 6% year-on-year to Rs 125 per square foot per month. This uptick was supported by quality-driven demand and limited new supply. Vacancy levels remained stable at 18.3%, even as new completions declined by 12% annually.

Gulam Zia, International Partner, Senior Executive Director, Research, Advisory, Infrastructure and Valuation at Knight Frank India, commented, “Mumbai's office market continues to demonstrate long-term stability, with 2025 recording the second-highest annual leasing volume in over a decade. The most compelling story is the rapid rise of GCCs, whose market share nearly tripled this year as global firms leverage Mumbai's deep talent pool for high-end analytics and shared services.”

On the residential front, Mumbai registered annual home sales of 97,188 units, marking a 1% year-on-year increase. Sales in H2 2025 rose 3% to 50,153 units. Average residential prices climbed 7% annually to Rs 8,856 per square foot, reflecting steady end-user demand and controlled supply. Knight Frank noted a visible shift away from the affordable housing segment, with demand increasingly concentrated in higher ticket sizes, particularly in the Rs 2-5 crore category.

Improved infrastructure connectivity, including the operationalization of Metro Line 3 and the Mumbai Trans Harbour Link, continued to support demand in peripheral and suburban markets, the report added.