Absorption of office space in Mumbai amounted to only 1 million square feet in the July-September quarter, a drop from the 1.2 million square feet absorbed in the previous three months, revealed a study by Colliers International Inc, a global real estate services company.
Overall, the study revealed, Mumbai accounted for only 10 per cent of the office space absorbed in the September quarter, below cities such as Hyderabad and Chennai.
As per the study, during the September quarter, “business activities were disrupted by heavy rainfall and infrastructure issues”.
“We expect leasing transaction momentum to pick up in coming quarters with stable rents and quality Grade A new supply. In addition, developers should witness additional demand from coworking players as many local operators are looking to expand their present footprint,” it added.
The study also revealed that central suburbs (Powai, Vikhroli, Kurla) and western suburbs (Andheri, Goregaon) accounted for 39 and 20 per cent of the total absorption, respectively.
Navi Mumbai and Bandra Kurla Complex had a share of 16 per cent, each, while central Mumbai — consisting of Worli, Prabhadevi and the central business district — accounted for the remaining 9 per cent.
Colliers has projected 9-10 million sq ft of the new office space supply to emerge by 2020, mostly in Navi Mumbai and the western and central suburbs.
This will lead to a 7-8 per cent increase in total stock, it stated.
In the immediate term, it expects a 3 per cent increase in the total office space stock by the end of 2017.
The study also found that rents were set to remain stable over the next three years, with premium buildings in BKC, Worli, Lower Parel commanding above average market rents.