Kopar Khairane

Mumbai’s supply of new office space fell by 23% last year, but this year’s numbers could be higher: Vestian

<p>As a result of developers’ reduced attention to this asset class in recent years due to concerns about a decline in demand due to the COVID epidemic, Mumbai had a 23% decrease in new office space supply last year, to 2.7 million square feet, according to Vestian.</p>
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<p>A decrease in the new supply of office space was partly caused by the increase in home demand in recent years, according to real estate expert Vestian.</p>
<p>In 2022, there was 3.5 million square feet of newly available office space. According to the statistics, there was a 7.5 million square foot supply of office space in 2018, 5.3 million square feet in 2019, 4.1 million square feet in 2020, and 6.5 million square feet in 2021.</p>
<p>But according to Srinivas Rao, CEO of Vestian, fresh supply could rebound this year as demand increases and workers gradually return to the workplace.</p>
<p>According to the consultant, a little increase of 3.8% in rents occurred over the last year due to a decrease in the availability of new office spaces and an increase in the demand for workspaces.</p>
<p>Vibrant infrastructural development, the rise of other asset classes, and strong fundamentals should all contribute to the Mumbai real estate market’s continued buoyancy. Although the availability of office space has decreased over the last three to four years, Rao said that strong demand and the increasing popularity of work-from-office policies might cause it to pick up speed.</p>
<p>Mumbai, one of India’s busiest real estate markets, made up only 6% of the 48 million square feet that were supplied in seven major cities last year.</p>
<p>Since 2018, the supply has been declining, and COVID-19 in 2020 will cause it to slow even further. It did, however, briefly rise to 6.5 million square feet in 2021 before declining once again.</p>
<p>In the midst of this unpredictability in the city’s office market, developers adjusted their portfolio strategies. Due to strong demand during the epidemic, several asset groups, including residential, data center, and warehouse, saw an increase of activity. As a result, office assets in the city became far less appealing, gradually slowing the supply, according to Vestian.</p>
<p>It also said that one of the main factors undermining developers’ trust in the last four to five years has been the emergence of other metropolises as more inexpensive alternatives to Mumbai.</p>