2013 Review:
- Increased Absorption
- Reduced Vacancy
- Rental & Capital Values Rise
- Stock Growth Slows
- CBD/SBD Lose Further Market Share
Despite the uncertain economic conditions, absorption of office spaces in Mumbai rose by 4.4% y/y to 7 million square feet in 2013, as against the 6.7 million square feet in 2012. As a result, vacancy fell to 22.9% in 2013 from 24% in 2012. Nearly 7.5 million square feet of new supply was added to Mumbai’s office stock in Mumbai in 2013 – an increase of 8.8% y/y compared to the 18% growth in stock in 2012. The total current office stock in Mumbai stands at 91 million square feet.
2014 Outlook:
- Overall stock will rise 7.4%
- Vacancy will fall 0.5-1.0%
- CRE Investment will increase
- 2014 elections can be a game-changer
In 2014, the shortage of high-quality office spaces in Mumbai will intensify. However, overall office stock in the city is expected to rise by 7.4% y/y in 2014. The sub-markets which will see highest rise in stock of office space include the West Suburbs, SBD North and East Suburbs (in that order). The CBD, SBD-Central and Thane-Navi Mumbai will witness the least or very moderate growth in stock.