Mumbai expected to be short of office space from 2018

India's financial capital Mumbai, will add between 12 million to 15 million sq ft of office space, an increase of about 16%, to its current Grade A office stock of 96 million sq ft in the next two years, according to  JLL India research.

“What needs to be noted about Mumbai is that the bulk of this projected 16% office supply consists of building launched many years ago,” says JLL India national director of research Ashutosh Limaye. 

“Before the global financial crisis in 2008, a healthy demand existed for office spaces and developers launched many new projects to cater to it.

“Post the 2008 crisis, the work on these buildings slowed down or halted altogether as builders faced dismal demand and recession,” he added.

Notably, Mumbai has not seen any new launches of office spaces in the past few years, and   supply will be “drying up in locations like Bandra Kurla Complex (BKC)  core and in the secondary business district (SBC-Central)”.

However, oversupply will be experienced in peripheral areas such as Thane and Navi Mumbai, where construction postponed during the global financial crisis is  now being resumed.

About 14 million sq ft of office space will be constructed between 2017 and 2019 in peripheral areas, where demand is not located.

“The upcoming grade-A supply scheduled to take place between 2017 and 2019 in the BKC core business district and SBD-Central will be just 2.37 million sq ft if delays do not occur,” Ashutosh said.  

“The expected demand for office spaces in these two areas in the same period will stand around five million sq ft and is expected to grow beyond 2019. In other words, the time is right for developers to launch new commercial projects in the city and suburbs,” he said.