Before we discuss our outlook for office space for rent in Mumbai in 2018, let’s briefly go over the prior year as it will give context to our views in this current year.
In 2017, the Mumbai office space for rent segment of the overall commercial real estate market saw arguably the most support. Post demonetisation (where the Indian Government banned 500 & 1000 Rupee notes) in November 2016, led to tepid demand in Q1 2017 which certainly picked up as the year progressed. Nevertheless its effects on the demand for office space in Mumbai did have an impact where rates for offices on rent in Mumbai as well as offices spaces in Navi Mumbai & Thane, did not increase and even came off slightly. With that said, when comparing the office space for rent segment vs other property in Mumbai categories such as luxury residential as an extreme example, the rental rates for offices on rent in Mumbai category held up quite well. More specifically, thru our property site’s findings, the rate for office space for rent in Mumbai, Thane & Navi Mumbai were largely flat YoY to down slightly (less than 5-10%).
One of the reasons the rental rates for office spaces in Mumbai didn’t decrease is for a few reasons, mainly foreign players continue to expand and require office spaces for rent in Mumbai & its surrounding areas and as well the demand for office spaces in Mumbai was supported by the expansion and creation of so many different coworking space companies. Let’s put it this way, two to three years ago there were hardly ten coworking spaces in Mumbai now in 2018 there will likely be over two hundred in Mumbai, Thane & Navi Mumbai!
That segues nicely into our view for office space in 2018. We do continue to see a substantial pick up in the demand for coworking spaces in Mumbai, Thane & Navi Mumbai this year (we recently wrote a blog article that discussed how cowokring spaces are now looking for very large office spaces). We also see continued interest in foreign players and an increased interest by domestic firms growing their businesses footprint in Mumbai as well. However, this will likely be offset by the inventory in the market. Even in the most prime and sought after areas, such as office spaces in BKC, there is still a substantial amount of inventory that is already on the market and much that will be deployed in early 2018.
With that said, our view for rental rates for office space in Mumbai in 2018 will be no change to rates for the first half of the year and then in the second half, mostly likely Q4, we could see the inventory shrinking down while demand will likely only increase so only then will you likely see rates increase. Each area within Mumbai, Thane & Navi Mumbai has its own unique demand & supply – so the above is simply a broad overview for 2018, an average if you will.
It’s also important to note that Jagaha.com does not have it’s own research department, our views are on the ground thru our real estate advisor team, thru meeting developers and landlords and thru monitoring the inquires that come thru our property site.
In conclusion, if looking for an office on rent in Mumbai, Thane & Navi Mumbai…. don’t stress too much, but we would recommend you choose a place by the latest Q3 of this year.