Office Leasing Plummets in Mumbai and Delhi-NCR: A Closer Look at the Real Estate Sector
Net leasing of office space across Mumbai and Delhi-NCR declined 51 per cent year-on-year to 3.28 million sq ft during the January–March quarter, driven by lower fresh supply, according to data released earlier this week by Cushman & Wakefield.
The two key markets had recorded a combined net leasing of 6.74 million sq ft in the corresponding period last year. Net absorption, which measures the change in occupied office space, is considered a key indicator of demand in the commercial real estate sector.
Mumbai recorded a 38 per cent decline in net leasing to 1.77 million sq ft from 2.87 million sq ft a year earlier. Delhi-NCR witnessed a sharper contraction of 61 per cent, with leasing dropping to 1.51 million sq ft from 3.87 million sq ft in the same period.
The decline in leasing activity was largely attributed to constrained new supply. Fresh office space additions during the quarter stood at 0.89 million sq ft in Mumbai and 1.8 million sq ft in Delhi-NCR, limiting the availability of Grade-A inventory for occupiers.
At a broader level, net leasing across eight major Indian cities—Delhi-NCR, Mumbai, Bengaluru, Hyderabad, Chennai, Pune, Kolkata, and Ahmedabad—fell 24 per cent to 11.51 million sq ft during the quarter, compared to 15.08 million sq ft in the year-ago period.
Despite the slowdown in absorption, rental values continued to show an upward trend. In Delhi-NCR, overall rentals increased by 2–5 per cent on a quarter-on-quarter basis, while year-on-year growth ranged between 6–9 per cent. Gurugram’s central business district recorded the strongest rental growth, with increases of 12–15 per cent over the same period.
Mumbai also saw a marginal rise in rentals, with stock-weighted average rents increasing 1.5 per cent quarter-on-quarter to around INR 171 per sq ft. Demand remained concentrated in key corridors such as Andheri–Kurla Road and Thane–Belapur Road.
The consultancy indicated that continued demand for high-quality office spaces is expected to sustain upward pressure on Grade-A rentals in the coming quarters, even as supply dynamics remain a critical factor influencing leasing volumes.
