Office Space in Mumbai Reaches All Time High!

There is currently an oversupply of commercial office space in Mumbai according to the Global Real Estate Institute (GRI) and Cushman & Wakefield (C&W).

The annual report revealed that there is approximately 78million square foot of Grade A office space available, against the demand of 33.9million square foot. This oversupply is expected to outstrip demand by 125% by 2015, which may lead to a downward price trend.

Experts believe that the excess office space is attributed to the information sector boom prior to 2006. However, India’s economic downturn between 2008-2009 meant that companies did not wish to expand, even though the rate of office space was continually growing.

 

There is now a large proportion of vacant office space in Mumbai, and the trend looks set to continue, as business centre developments in the National Capital Region (NCR) of India are underway. The only location where demand will outweigh supply, is Bangalore, where 57.3million square foot of office space is needed against the 26million square foot that will be constructed by 2015.

Arvind Nandan, Executive Director of C&W predicts that corporate businesses will look for ‘better value proposition in terms of rents, maintenance cost, parking and so on, while expanding and consolidating operations’. This suggests that office space in India’s top seven cities will see a reduction in rental rates, in the hope to entice company expansion.

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