Mumbai (Maharashtra) [India], September 9: Rising rentals, strong leasing activity and declining availability in several prime business districts are all pointing to sustained occupier confidence. And it is with this that India’s office market is entering a period of quality-led growth. In many real estate micro-markets, this indicates the business value associated with well-located, high-quality commercial assets. The increase in rents is not merely adding to the cost of occupying an office as companies are willing to pay for connectivity, amenities, operational efficiency and access to talent.
India recorded 45.5 million sq ft of office leasing in the first half of 2026, an increase of 9.6 per cent from a year earlier, according to CBRE data. Global Capability Centres (GCCs) accounted for 43 per cent of this demand, supported by multinational companies expanding technology, engineering, financial services and other strategic functions in the country.
Although leasing volumes may vary across studies because consultancies use different methodologies, the broader trend indicators have remained consistent. Cushman & Wakefield recorded gross leasing of 21.4 million sq. ft across the top eight cities during the second quarter of 2026. It said Bengaluru contributed 26 per cent and Mumbai and Delhi-NCR accounting for 19 per cent each. IT-BPM companies were the largest demand drivers, followed by flexible workspace operators, engineering and manufacturing companies, and banking and financial services firms.
“Rising office rentals are increasingly a sign of the strength and maturity of India’s commercial real estate market. The demand we are seeing is not merely for office space, but for well-connected, Grade A workplaces that offer quality, amenities and a better experience for employees. GCCs, technology companies, financial services firms and global businesses continue to drive this demand, while limited availability of premium spaces is supporting healthy rental growth in established markets such as Mumbai and Delhi-NCR. At the same time, emerging business destinations like Navi Mumbai are gaining momentum as infrastructure improves and occupiers look for efficient, future-ready locations. Markets such as Thane and Nerul are also gaining traction, supported by improving infrastructure, connectivity and the growing need for quality commercial spaces closer to established residential catchments . Over the next 12–24 months, we expect this trend to remain positive, with quality-led demand and infrastructure-driven growth shaping India’s commercial real estate landscape,” said Bhadresh Shah, Managing Director, Today Group.
This demand is increasingly concentrated in Grade A buildings that combine efficient floor plates, modern building systems, sustainability features, employee amenities and strong transport connectivity. Commonly called the “flight to quality,” this is a trend widening the distinction between premium developments and ageing or inadequately connected office stock. It is also the factor that allows high-quality buildings in established and emerging business districts to command stronger rents and maintain higher occupancy.
“Commercial real estate is increasingly moving towards a quality-led growth cycle, and Andheri is emerging as one of the key beneficiaries of this shift. Its connectivity, established business ecosystem and proximity to major residential catchments are attracting a wider mix of corporates, GCCs and professional services firms,” said Rohit Garodia, Founder and Managing Partner, Pecan Realty.
Mumbai illustrates how this demand is spreading across a network of business districts rather than remaining confined to a single commercial centre. Bandra-Kurla Complex continues to command premium rents because of its concentration of financial and professional services companies, access to talent and improving regional connectivity. But, Andheri, Goregaon, Thane and the Thane-Belapur corridor also provide businesses with a broader range of Grade A options at different rental levels.
“Mumbai is a good example of why rising office rents can be a sign of market strength rather than simply higher costs. In BKC, occupiers are willing to pay a premium because connectivity, access to talent and proximity to financial institutions create tangible business value,” said Aditya Pushkarna, Associate Director, Banke International Properties.
The development of multiple office clusters is important for a market as large and diverse as Mumbai. It offers companies the ability to match location decisions with talent catchments, operational requirements and occupancy costs. It also reduces dependence on traditional central business districts and supports the growth of commercial ecosystems closer to major residential concentrations.
“At the same time, Andheri and the Thane-Belapur corridor are attracting occupiers seeking Grade A infrastructure at a more efficient cost. This demonstrates the depth of Mumbai’s commercial market and its ability to offer multiple business districts,” Pushkarna said. “Strong leasing and tightening vacancy indicate that rental growth is being supported by genuine occupier demand and business expansion, rather than speculative pricing.”
Andheri’s established commercial base, access to the airport and connectivity through road and metro networks have helped the micro-market retain its relevance even as newer office destinations have emerged. Modern developments in and around are increasingly responding to occupier expectations linked to wellness, collaboration, sustainability, technology and workplace experience.
“As occupiers become more discerning about workplace quality, Grade A developments in well-connected locations are gaining stronger demand, which in turn supports rental resilience, occupancy and long-term capital value,” Garodia said. “Andheri’s evolution reflects how the right location, combined with institutional-quality infrastructure, can create sustained value for both occupiers and investors.”
Another micro-market that piques interest is Goregaon East. It is undergoing a similar transition. Infrastructure improvements, metro connectivity and the development of integrated commercial, residential, retail and hospitality projects are giving wind to the area’s appeal among businesses and investors. Its proximity to established residential neighbourhoods is also relevant at a time when companies are paying greater attention to commuting convenience and their ability to attract and retain employees.
“Goregaon East is increasingly emerging as a preferred destination for businesses and HNI investors, driven by strong infrastructure upgrades, seamless metro and road connectivity, and the evolution of integrated mixed-use developments,” said Vikash Kawar, Director of AGM Vijaylaxmi Group. “The micro-market is witnessing growing interest from occupiers seeking high-quality office spaces with superior accessibility and operational efficiency, while investors are recognising its potential for long-term capital appreciation and stable returns.”
The growth and expansion of Mumbai’s office geography is also strengthening the case for commercial development within MMR. In Thane, which has evolved as an independent economic and residential hub, a large residential base, improving infrastructure and growing business activity are generating demand. Thane as its response is creating the space for workplaces capable of supporting companies and employment within the city.
According to JLL, the MMR office market recorded its strongest-ever leasing quarter in Q1 2026, surpassing the previous peak set in late 2025. New supply stood at 1.3 million sq. ft, concentrated largely in Thane and SBD North, while average rents rose 0.7 per cent quarter-on-quarter and 3.4 per cent year-on-year. With nearly 24 million sq. ft of new office supply expected across Mumbai over the next two years, supported by strong pre-commitments and healthy absorption, Thane is strengthening its position as an established commercial hub.
Bhushan Bhanushali, Founder, VB Group observed that Thane’s distinct commercial identity is being strengthened by its established residential base, expanding business ecosystem and sustained investment in infrastructure. “Within this landscape, neighbourhoods like Vartak Nagar showcase strong connectivity with access to well-developed residential neighbourhoods and mature social, retail and civic infrastructure. Advantages like this give various localities of Thane a strong foundation to serve the changing requirements of businesses, professionals and consumers,” Bhanushali revealed.
Thane’s evolution as an independent economic and residential hub is eventually creating a natural need for a stronger commercial ecosystem. “As the city attracts businesses and employment opportunities, the demand for quality Grade A office spaces is also gaining momentum,” said Nishant Deshmukh, Founder and Managing Partner, Sugee Group.
“This reflects a broader shift where businesses are increasingly seeking modern, well-connected and amenity-rich workplaces that can support their evolving needs. The integration of high-quality commercial developments will be critical in enabling Thane to emerge as a more self-sustained urban centre, while also strengthening its long-term commercial potential,” Deshmukh added.
Going forward, new supply will remain an important factor in determining whether rental growth is sustainable over the next 12 to 24 months. Additions of well-planned Grade A stock can help make space for business expansion and prevent rents from moving beyond levels justified by occupier economics. However, new construction does not automatically weaken pricing. Buildings in less accessible locations or those that do not meet contemporary quality standards may struggle even when premium developments continue to record strong demand.
For developers, this means a far greater emphasis on planning, location, amenities, building management and long-term asset quality. For investors, rising rents and stable occupancy can improve income visibility and reinforce the value of institutional-grade commercial assets. Occupiers, meanwhile, will need to assess rents against the wider benefits of a location, including access to employees and clients, commuting time, operating efficiency and the ability of a workplace to support recruitment and retention.
“As commercial, retail, hospitality, and residential ecosystems continue to develop in tandem, Goregaon East is well-positioned to evolve into a future-ready business district aligned with the changing preferences of corporates and discerning investors,” Kawar said. “We believe the micro-market will witness sustained growth in Grade-A office leasing and investment activity over the coming years.”
Finally, the outlook for India’s office sector remains closely tied to GCC expansion, domestic business growth, flexible workspace demand and the continuing preference for better-quality buildings. Higher rentals will make sense where they are supported by falling vacancy, genuine business expansion and a shortage of suitable premium space. In that context, rental and capital appreciation are not simply indicators of higher cost. They represent the increasing economic relevance of a well-connected, efficiently operated and institutionally managed commercial real estate.
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