The office market of Mumbai experienced a notable increase in leasing activity, reaching approximately 7.4 million sq ft marking a 16.3% YoY growth in the year 2023 according to Knight Frank India latest report, India Real Estate: Residential and Office (July - December 2023).
The leasing landscape was prominently shaped by a significant presence of BFSI (Banking, Financial Services, and Insurance) firms. Mumbai's trajectory in office leasing has consistently shown improvement, reaching its highest transaction volume since 2020. India facing business accounted for most transactions, contributing around 78% to the overall share in 2023.
Mumbai has experienced a significant influx of new supply driven by heightened office transactions and increased confidence among developers. The total supply added during the year amounted to 3.1 mn sq ft, reflecting a substantial year on year (YoY) increase of 51.6%
The new office supply in Mumbai commercial market for the year 2023 saw a robust increase of 51.6% YoY, totaling 3.1 mn sq ft to due to increased office transactions and enhanced developer confidence. Approximately 40% of the new office launches were concentrated in SBD West micro market, followed by PBD with 20%.
In terms of the end-use split of office spaces transacted, India Facing Business dominated more than half of the commercial market in Mumbai occupying 77% of the area. In 2023, 5.8 mn sq ft of area was transacted by India Facing Business which when compared to 2022 has seen a slight jump from 5.3 mn sq ft of area transacted. This was followed by GCC’s occupying a share of 10%, Flex office spaces at 8%, and Third-Party IT services at 3%.
Rents in Mumbai office market have demonstrated a consistent upward trend, indicating stable growth post-pandemic. In 2023, rents witnessed a YoY growth of 3.6% with average transacted rent recorded at INR 114 sq ft per month.
