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Wednesday, July 10, 2013

Mumbai office space market to cross 100 million sq ft In 2014

 Mumbai's commercial real estate stock is estimated to cross the 100 million square feet mark by the 4th quarter of 2014. The current stock stands at 87 million square feet. When it touches the 100 million square feet mark, the vacancy rate is going to hover at 22.2%, says Ramesh Nair, Managing director-West, Jones Lang LaSalle, India..
When the city's supply of CRE reaches this milestone, the three largest micro-markets will be SBD North with 22 million square feet, Thane and Navi Mumbai with 21 million square feet and the Western Suburbs with 16 million square feet. At that point, the two other heavyweight CRE markets - Bangalore and Delhi NCR - will have 86 million and 89 million square feet respectively.

Interestingly, the United States has 12 cities with over 100 million square feet of commercial property stock. New York is the largest office market with 444 million square feet, followed by Washington, DC with 327 million square feet and Chicago ranking third with 235 million square feet. Other markets with commercial real estate stock in excess of 100 million square feet include Bay Area, Los Angeles, Boston, Dallas, New Jersey, Houston, Philadelphia, Atlanta and Denver.

In Europe, Paris - the largest office market in the world - has 569 million square feet of commercial office stock. The other large markets in Europe include London and Munich with 219 million and 214 million square feet respectively. Other markets in Europe with more than 100 million square feet of office stock are Berlin, Madrid, Moscow, Hamburg, Brussels, Milan, Rome, Frankfurt, Stockholm, Copenhagen and Vienna. In Asia, Hong Kong has 88 million square feet of commercial office space.

India Commercial Real Estate Market Update - 3 Q 2013

Across India, the first half of 2013 has seen office space absorption of 13 million square feet, as opposed to 12.8 million square feet during first half of 2012. The first half of 2013 saw the completion of 19.3 million square feet of office real estate, as opposed to 10.7 million square feet in first half of 2012. Among all markets, Mumbai witnessed the highest absorption of office space in the first half of 2013, with 3.8 million square feet.

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. This is a reasonable assumption to make, given that American companies already account for 51% of the commercial office space leased in India.

In the medium term, large tenants in prime markets will have to contend with a supply-constrained marketplace, with few big blocks of contiguous quality space available on the market. However, office markets across Mumbai will continue to be tenant-favourable for the balance of the year, with occupiers benefiting from an increased choice of new high-quality premises and reduced occupancy costs.

Expansion demand is expected to be subdued in 2013, but relocations and consolidations are going to add buoyancy in leasing activity. Rents in most of Mumbai’s micro-markets have stabilised, and most of them are now showing convincing indications of having bottomed out. Given the basic scarcity of available right-sized Grade A office stock in Mumbai's prime locations, rentals are expected to go up by around 6% in 2013.

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  2. We are familiar to Mumbai well. Its widely known to India for its popularity. The demand of commercial and residential property in this city is one of the top priority. Every customers wanna to move towards this city setting up their business and residence both due to its popularity. Now we're close to coming 2014 and its essential to know to us that which location would be more profitable for builder and customers.

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