MUMBAI: Mumbai is expected to add around 16 million sqft of fresh office space by the end of 2017. The current office stock in the city is at 106 million sqft and is likely to add 8% of this stock, or almost 8.5 million sqft, through this year.
The commercial capital of the country figures in the top three cities globally that will add the maximum supply of Grade-A office space through 2017, according to a recent finding by JLL India. Shanghai tops the list among major global markets, followed by Mexico City, Mumbai, Beijing, Singapore, Sao Paulo, Tokyo, Moscow, San Francisco and London in the top 10, as of first half of 2016.
Much of this projected office supply consists of buildings launched many years ago as Mumbai has seen only a few launches in the past few years. While the perip heral areas will see an oversupply, the supply at prime locations will be relatively less. The Gra de-A office supply is likely to co me up in 2018-19 in the city’s defacto central business district (CBD) of core Bandra-Kurla Complex (BKC) and SBD Central (Lower Parel) will be 1.6 million sq ft in an ideal scenario of no delays,” said Ashutosh Limaye, national director research, JLL India.
Most of the balance supply of office space is expected to come up in the peripheral areas of the city and this will have implications after 2019, with supply drying up in the right locations. Also, rentals in the central locations are expected to move up even as rentals in peripheral areas will remain stagnant.
These figures do not factor in construction delays. However, if few projects move beyond its construction deadlines or procurement of Occupancy Certificate, the supply could be around 13 million sq ft by 2017-end, which is significant nonetheless.
In the survey that covers all office sub-markets in each city, it’s the markets from emerging economies that dominate the top-10 list.Shanghai is at the top spot with 42% of its current stock to be added in the next 18 months, followed by Mexico City at 22.5%, the JLL survey showed. Beijing with 14%, Sao Paulo at 10% and Moscow at 7% are three other cities from emerging economies among the top 10. Among the mature economies, Singapore City will add 11%, Tokyo 9%, San Francisco 6% and London 5% of their current office stock.