Demand for prime office space in Mumbai sees 50% rise: Report
MUMBAI: A CBRE report released on Wednesday said demand for prime office space in Mumbai during the January-March 2016 period saw a quarter on quarter rise of almost 50% over that of Q4 2015.
“Demand trends for corporate real estate picked up in Mumbai during the period, noting a healthy mix of front and back-office space transactions by corporate occupiers. Improving market sentiments and healthy pre-commitment levels in under-construction developments were the primary drivers for quarterly improvement in office space demand,” it said.
Notable office space transactions in the city during the quarter were observed in the office districts of Goregaon and Andheri. BFSI and IT/ITeS sectors continued to drive office space take-up during the quarter, especially in the peripheral locations of Goregaon, Navi Mumbai and Thane. On the supply front, the CBRE report said the city witnessed a little less than a million square feet of fresh office space being added in Q1 2016. Development completions were noted at Goregaon (East), Andheri (East) and Thane in the period.
Rental values in the city continued to remain stable across micro-marketsbarring the peripheral locations of Goregaon / Powai and Thane / Navi Mumbai, which noted a slight quarterly increase due to increased occupier demand in quality IT and SEZ projects. Meanwhile, the city recorded capital value growth for non-IT space across most front office space locations in the first quarter.
Corporate occupier interest remained concentrated on the prominent back-office districts of Navi Mumbai, Thane, Vikhroli, Goregaon and Andheri. The city also witnessed a few large scale transactions of above 100,000 sq. ft. during the quarter. Going forward, India’s appeal as an established outsourcing market will continue to fuel expansion initiatives from corporate firms based out of the US as well as from Europe, the Middle East and Africa (EMEA) in leading Indian cities such as Mumbai. Positive domestic macro-economic sentiments are also likely to propel prime office space leasing from domestic corporate firms in the city in forthcoming quarters.