Mumbai’s commercial Real Estate sector sees significant growth

Mumbai’s commercial real estate sector is experiencing robust growth, driven by increasing demand from the IT, BFSI, and co-working sectors. Reports from leading real estate firms such as JLL, Knight Frank, and Square Yards underscore this positive trend, reflecting the market’s resilience and post-pandemic recovery.

According to JLL, Mumbai witnessed a 22% increase in office space absorption in the first quarter, with a total of 2.5 million square feet of transactions. The IT and BFSI sectors led this demand, accounting for 45% and 20% of the total leasing activity, respectively. This highlights the city’s position as a critical hub for these industries.

Knight Frank’s research indicates a significant rise in commercial real estate investments, with Mumbai attracting approximately USD 1.2 billion in the first half of the year. The report emphasizes the growing preference for Grade A office spaces, which appeal to both multinational corporations and domestic enterprises looking to expand.

Square Yards’ analysis shows that rental values in prime business districts such as Bandra-Kurla Complex (BKC) and Lower Parel have increased by 10% year-on-year. BKC leads with the highest rental rates, averaging INR 350 per square foot per month, reflecting strong demand and limited supply in premium locations.

Co-working spaces have also impacted Mumbai’s commercial real estate significantly. JLL reports that flexible workspace operators accounted for 15% of the total office leasing activity in the first quarter, indicating a shift towards adaptable and cost-efficient office solutions.

Manju Yagnik, Vice Chairperson of Nahar Group and Senior Vice President of NAREDCO Maharashtra, stated, “The commercial space in metro cities is experiencing unprecedented growth, driven primarily by the rapid expansion of the IT and services sectors. The increasing demand for office spaces from established enterprises and burgeoning startups is the key factor propelling this surge.”

Kunal Chheda, CEO of Awas Group, noted, “BKC is attracting a lot of international investors. The BFSI sector dominates Mumbai’s leasing absorption, accounting for about 69% of the total. Global occupiers from industries such as BFSI continue to expand their GCCs, especially in areas like BKC, thus drawing significant attention from international investors.”

Dhruv Raicha, Partner at Shreeji Construction, highlighted, “The favourable economic indicators, along with political stability, have enhanced the appeal of the Indian economy to investors. The commercial real estate sector is experiencing rapid growth, presenting an opportune moment to invest in India.”