Cap rates stable across sectors in Mumbai and Bengaluru in Q1 2025, despite robust leasing activity
Leading global diversified professional services company, Colliers, released its Q1 2025 Asia Pacific Cap Rates Report, which reflected that key Asia Pacific property markets remained stable in the first quarter of the year. 12 of the 19 markets monitored in the report demonstrated stable cap rates. The sector with the most movement in rates was industrial, with growth in the sector anchored by solid fundamentals and innovation despite oversupply in some markets.
In India, Bengaluru and Mumbai exhibited resilience, with stable cap rates across sectors despite robust leasing activity. Mumbai's office leasing rose 24% year-on-year with moderate rental growth citywide. Limited supply drove higher rentals and occupancy, while cap rates remained stable. Mumbai retail capital values outpaced rental growth. The opening of three new malls in 2025 is expected to stabilise rental values and moderate capital values. Bengaluru retail displayed trends consistent with Q4 2024.
“Sustained leasing momentum and institutional capital inflow with softening interest regime combine to ensure cap rates remain range bound. In spite of supply chain structural change due to geopolitical impacts, industrial assets in India continue to attract investments backed by sustained leasing momentum resulting in range bound cap rates.”, said Ajay Sharma, Managing Director, Valuations Services, Colliers India.
The report explores how investors are navigating the shifting market dynamics and balancing caution with opportunity in a climate of uncertainty. Across the markets covered in the report, the office sector has been at a crucial juncture, the retail segment has been harnessing local strengths, and the industrial sector has been anchored in innovation.
Above views are of the author and not of the website kindly read disclaimer
