Mumbai, 12 February, 2019 – In Q4
2018, Mumbai recorded gross absorption of 2.1 million sq ft, registering an
increase of 5.7% QoQ. Leasing activity was concentrated in the micromarkets of
Andheri East (30%), Bandra-Kurla Complex-BKC (18%), LBS/Eastern Suburbs (16%),
and Goregaon/JVLR (13%). The leasing activity was dominated by media
and advertising occupiers, which accounted for nearly 22% of quarterly gross
absorption, replacing flexible workspace operators as the top contributors to
gross leasing after several quarters. The media segment was closely followed by
BFSI occupiers representing 21% of quarterly gross absorption and flexible
workspace operators accounting for 12%.
real estate in Mumbai is moving to the next level. Institutionalised developers
and owners of real estate are changing the playing field of the office market. It’s
clearly reflected in the occupancy levels of the recently signed co working
spaces and fast vanishing quality office supply in the City”, says Sangram
Tanwar, Senior Director, Office Services (Mumbai) at Colliers International
The growing need for
workspace efficiency and a collaborative work environment increased demand for
flexible workspaces in 2018. In 2018, flexible workspace operators accounted
for 20% of gross absorption, second only to the BFSI sector which accounted for
This represented a threefold increase from the level of 2017. The demand for
flexible workspaces were mainly driven by increased demand from the IT
industry, looking for ways to mitigate real estate costs and seeking flexible
Continuing with the
trend in 2018, we expect the BFSI sector to drive leasing activity through H1
2019 due to steady enquiries by occupiers looking to consolidate their office
premium front-office space, BFSI occupiers should focus on BKC micromarket,
while cost-sensitive occupiers should evaluate options in micromarkets such as
Lower Parel and Andheri.
In Q4 2018, Mumbai
witnessed new supply of 1.03 million sq ft. This is only the second time Mumbai
has seen over 1.0 million sq ft of new supply, after Q2 2018. About
81% of the new supply was concentrated in the LBS Road/Eastern Suburbs
micromarket, and the remaining in Navi Mumbai. These projects were completed
later than scheduled; however, this should provide opportunities to occupiers
looking for large contiguous floorplates in Grade A developments in these
We expect about 9.0
million sq feet (840,000 sq metres) of new supply over 2019-2021. Most of the
planned supply is concentrated in the Andheri East and Navi Mumbai
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