In 2012 net absorption of Mumbai was down by 31% y-o-y (year-over-year) than the preceding year. The absorption of office space was recorded 1.8 million sq ft in quarter hour of 2012 which was declined from the third quarter of the year. The existing buildings had the major demand than the recent completion done in the city. 80% of the total take up was reported by leasing businesses while the remaining was shared by selling activities. The vacancy rate of the city was 24.1% in 2012 according to documentation. The CBD, Nariman Point Fort and Cuffe Parade remained inactive for the fourth quarter in terms of commercial leasing activity.84 million sq ft of the total new stock was recorded with 4.0 million sq ft of office space in the final quarter of 2012. Total completion was lowered by 16.0% in the fourth quarter of the year. Major completions in the city were as follows
- Naman Midtown’s tower A and tower B accounted 480,000 sq ft in Lower Parel
- With 1.1 million sq .ft., The Capital at BKC
- Phase 1 and 2 of Star Hub in Andheri East with 210,000 sq ft area
- Lotas Park, 188,000 sq ft in Thane
Most of Mumbai’s submarkets had the stable rent and capital values except the secondary and peripheral districts. Stable market condition in CBD and SBD-north was maintained by the contribution of alternate CBDs in Mumbai central in addition to lack of quality office supply. The change in market conditions has emerged alternate CBDs, SBD Central and SBD BKC. Many occupiers purchased property in the fourth quarter of the year like Israeli Consulate purchasing 10,000 sq ft in Marathon Future Ex in Lower Parel and Aegis Logistics purchasing 16,000 sq ft in Tower B of the Peninsula Business Park in Lower Parel.Important leasing activities in the suburb were as follows
- Thermo Fisher Scientific India Pvt Ltd. leasing 60,000 sq ft in Phase 1 of Reliable Tech Park in Airoli
- Care Ratings leasing 20,000 sq ft in HDIL Kaledonia in Andheri East
- JM Financial leasing 97,000 sq ft in Cnergy in Prabhadevi
Future Prediction:Cost control, consolidations and/or relocations these strategies of corporate real estate will be the dominant amongst the occupiers in initial part of the 2013. These strategies are most likely going to abate the net absorption levels in the first half of 2013 in contrast of 2012. The recovery in the global economy is most probably going to affect the recovery of net absorption levels in the second half of 2013 due to the improve business sentiments. Increase in the rent and capital values are expected in 2013.Quick points:
- The fourth quarter absorption was marginally declined
- Rental growth and capital value growth were proportionate with each other
- Secondary and peripheral business districts observed considerable rent rise