The commercial real estate market in Mumbai is finally bouncing back after a prolonged recession-induced slump. According to a recent report by property consultants Knight Frank, the commercial market in Mumbai is showing signs of revival and enquiries are on the rise.
The first three quarters of financial year 2010-11 witnessed more transaction of office space at 6.83 million sq ft than the entire last fiscal, which saw only 6.68 million sq ft uptake of commercial realty space.“The postponement of expansion plans by many BFSI (Banking, Financial Services and Insurance) and IT/ITES companies, which are the principal drivers for commercial office demand in Mumbai further, affected the overall office market,” says the report.
It is only recently that commercial rentals have started stabilising after nose-diving from July 2009 to December 2010 due to a feeble demand for the excess supply. Lately, some pockets in Mumbai have shown an improvement in absorption by the BFSI and IT/ITES sector, which accounted for more than 60 per cent of the transactions for the last two years.
The total office space transaction during the first three quarters of this year saw 27 per cent from BFSI sector, a steep decline from its share of 41 per cent during last year. On the other hand, the IT/ITES sector had a share of 37 per cent of transacted office space this year as against only 20 per cent last year.
“During the slowdown, the IT sector had hit rock bottom. Over the last two quarters since the economy both in India and globally started moving upward, IT firms like IBM, Infosys have started recruiting. The sectoral growth may plateau eventually, but the firms know that this is the right time to expand,” said Samantak Das, National Head for Research at Knight Frank (India)
Source: Indian Realty News