Mumbai office market crossed 100 million marks: Report

By Accommodation Times News Service

According to real estate consultant Jones Lang La Salle, the total absorption of commercial office space in India has increased marginally in the first half of 2013 to 13 million sq ft compared to 12.8 million sq ft. Mumbai saw 3.8 million sq ft of space being absorbed in this period, the highest in the country. The first half of 2013 saw 19.3 million sq ft being completed compared to 10.7 million sq ft last year. In report stated that, Ramesh Nair, MD west said, with the balance sheets of American companies looking decidedly healthier this year on account of a visibly improving economy, we can expect them to focus more intensely on the Indian office market. According to JLL, expansion demand is expected to be subdued in 2013, but relocations and consolidations are going to add buoyancy in leasing activity. Rents in many micro-markets across Mumbai have stabilized with some of them showing indications of bottoming out. Rentals are expected to go up by around 6% in 2013 “given the basic scarcity of available right-sized Grade A office stock in Mumbai’s prime locations.”

By the fourth quarter of 2014, though, Mumbai’s commercial real estate stock is estimated to cross the 100 million sq ft mark. The city currently has 87 million sq ft of commercial office space. “When it touches the 100 million sq ft mark, the vacancy rate is going to hover at 22.2%,” says Nair.

At that point, the two other heavyweights commercial real estate markets—Bangalore and Delhi NCR—will have 86 million and 89 million square feet respectively.

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