Mumbai: Leading diversified real estate professional services firm, Colliers, released its Q2 2025 Asia Pacific Cap Rate Report. Several markets in the Asia Pacific region maintained a steady investment rhythm in the second quarter of 2025, even as market dynamics diverge across sectors and geographies.
According to the report, retail emerged as the standout performer across most APAC markets last quarter, with stable yields and strong tenant demand driving performance in most key cities.
“Consistent demand amid a slowdown in ready-to-move-in supply has enabled commercial real estate yields to increase marginally across the key markets in India. However, there is caution being exercised given the global trade related uncertainties that have kept investment activities in check for occupiers, which has, in turn, kept cap rates range bound.
Industrial demand has been buoyed by domestic consumption leading to consistent demand for warehousing in India but is expected to moderate as markets mature and supply chain efficiencies improve with selective dealmaking in the sector from large investors. Retail demand remains consistent with ATDs increasing. driven by better interest rate regimes and concessions in personal tax. This, in turn, has increased footfall in malls across urbanized centers, and is expected to continue its growth. The increase in new operational supply in various markets has kept growth of rentals in check, ensuring that cap rates are mostly range bound.”, says Ajay Sharma, Managing Director, Valuation Services, Colliers India.
The report covers several highlights of the India market including:
Office
Bengaluru’s office market, led by IT/ITeS and startup demand, has seen a slight uptick in average rents due to falling vacancy levels. Amidst limited new supply, Mumbai’s vacancy dropped by 3% while rentals firmed up by 11.9% on an annual basis.
Retail
Leasing in Bengaluru, largely structured on minimum guarantee plus revenue share, has prime assets rents trending upward, supported by higher average trade density. In Mumbai, the launch of two new malls in Q2 temporarily increased vacancy, which is expected to ease as tenant occupancy progresses.
Industrial
Rentals and capital values in Bengaluru remain stable, with consistent cap rates. Industrial leasing, driven by engineering and e-commerce players, remains strong, with Mumbai’s warehousing rentals seeing modest year-on-year growth.
