India Real Estate: Residential and Office (July - December 2024) cited that Mumbai's office market continued its strong momentum, driven by high leasing activity, increased new supply, and steady rental growth. The city recorded a historic high in office transaction volumes in 2024, reaching 10.4 mn sq ft, marking a 40% YoY increase from 7.4 mn sq ft in 2023, stated Knight Frank India in its latest report.
In the second half of 2024, Mumbai saw office space transactions totalling around 4.6 mn sq ft, reflecting a 9% YoY growth. This surge in leasing activity was driven by a solid pipeline of deals across multiple sectors, with transactions led by India-facing businesses. H2 2024 also marked the fifth consecutive half-yearly increase in transaction volumes since H2 2020, reinforcing the city’s status as a major commercial hub.
India facing business accounted for most transactions in Mumbai, contributing around 77% to the overall share in 2024.In 2024, Mumbai saw the addition of 5.8 mn sq ft of new office supply, reflecting an 89% year-on-year growth compared to 2023. A significant portion of this supply was delivered in the SBD West, in line with the increasing demand for submarkets offering premium spaces and enhanced connectivity.
The new office supply in Mumbai commercial market for the year 2024 saw a robust increase of 89.2% YoY, totaling 5.8 mn sq ft out of which 1.6 mn sq ft was introduced in H2 2024. The majority of this supply was concentrated in SBD West, reflecting the increasing demand for submarkets that offer premium spaces and better connectivity.
In terms of the end-use split of office spaces transactions, India Facing Business dominated more than half of the commercial market in Mumbai occupying 77% of the area. In 2024, 7.9 mn sq ft of area was transacted by India Facing Business which when compared to 2023 was 5.8 mn sq ft of area transacted witnessing a YoY growth of 37%. This was followed by Flex office spaces occupying a share of 12% which was driven by growing popularity of hybrid work models, followed by GCC’s at 7%, and Third-Party IT services at 4%.
Rents in Mumbai’s office market experienced a steady growth trajectory with a YoY increase of 3.5 % with average transacted rent recorded at INR 118 sq ft per month in 2024. The operationalization of new metro lines and other infrastructure upgrades have significantly bolstered occupier confidence and demand for premium locations.
