by Mr. Ramesh Nair, MD - West, Jones Lang LaSalle India
Mumbai's commercial real estate stock is estimated to
cross the 100 million (10 Crore) square feet mark by the 4th quarter of 2014.
The current stock stands at 87 million (8.7 Crore) square feet. When it touches
the 100 million square feet mark, the vacancy rate is going to hover at 22.2
per cent.
When the Mumbai city's supply of CRE reaches this
milestone, the 3 largest micro-markets will be SBD North with 22 million (2.2 Crore)
square feet, Thane and Navi Mumbai with 21 million (2.1Crore) square feet and
the Western Suburbs with 16 million (1.6 crore) square feet.
At that point, the 2 other heavyweight CRE markets -
Bangalore & Delhi NCR - will have 86 million (8.6 Crore) and 89 million
(8.9 Crore) square feet respectively.
Interestingly, the United States has 12 cities with over
100 million square feet of commercial property stock. New York is the largest
office market with 444 million square feet, followed by Washington, DC with 327
million square feet and Chicago ranking third with 235 million square feet.
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| Ramesh Nair, MD - West, Jones Lang LaSalle India |
Other markets with commercial real estate stock in excess
of 100 million square feet include Bay Area, Los Angeles, Boston, Dallas, New
Jersey, Houston, Philadelphia, Atlanta and Denver.
In Europe, Paris - the largest office market in the
world - has 569 million square feet of commercial office stock. The other large
markets in Europe include London and Munich with 219 million and 214 million
square feet respectively.
Other markets in Europe with more than 100 million
square feet of office stock are Berlin, Madrid, Moscow, Hamburg, Brussels,
Milan, Rome, Frankfurt, Stockholm, Copenhagen and Vienna. In Asia, Hong Kong
has 88 million square feet of commercial office space.
India Commercial Real Estate Market Update - 3 Q 2013..!
Across India, the first half of 2013 has seen office space
absorption of 13 million square feet, as opposed to 12.8 million square feet
during first half of 2012. The first half of 2013 saw the completion of 19.3
million square feet of office real estate, as opposed to 10.7 million square
feet in first half of 2012.
Among all markets, Mumbai witnessed the highest
absorption of office space in the first half of 2013, with 3.8 million square
feet.
With the balance sheets of American companies looking
decidedly healthier this year on account of a visibly improving economy, we can
expect them to focus more intensely on the Indian office market. This is a
reasonable assumption to make, given that American companies already account
for 51 % of the commercial office space leased in India.
In the medium term, large tenants in prime markets will
have to contend with a supply-constrained marketplace, with few big blocks of
contiguous quality space available on the market. However, office markets
across Mumbai will continue to be tenant-favourable for the balance of the
year, with occupiers benefiting from an increased choice of new high-quality
premises and reduced occupancy costs.
Expansion demand is expected to be subdued in 2013, but
relocations & consolidations are going to add buoyancy in leasing activity.
Rents in most of Mumbai’s micro-markets have stabilised, and most of them are
now showing convincing indications of having bottomed out.
Given the basic scarcity of available right-sized Grade
A office stock in Mumbai's prime locations, rentals are expected to go up by
about 6 % in 2013.
For Media Contact..!
Mr. Arun Chitnis
Head – Corporate Communications & Media Relations
Jones Lang Lasalle India
Level 6, Amar Avinash Corporate Plaza
Bund Garden Road, Pune - 411 001.
Tel: 020 - 3093 0441 Fax: 020- 4019 6101
Mob: +91 96571 29999
Website: www.joneslanglasalle.co.in
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