city report mumbai office market - BNP PARIBAS - Investment ...

SUMMARY
More enquiries from corporate occupiers, though low conversion rate
The Q4 of 2009 saw an increase in enquiries from corporate
occupiers in the Mumbai region. In fact, many corporates are also
evaluating buy verses lease scenarios which is good news for real
estate developers and owners who are keen to sell to corporate end
users. It must be specifically noted that the conversion rates of these
enquiries into sales remain low. The peripheral areas are showing
signs of revival with strong leasing activity especially in the Powai
area. However, many large ticket transactions, especially in excess of
100,000 sq. ft, which were anticipated to conclude in this quarter has
been postponed to the next quarter. Overall, the lease rents and
capital values are under pressure due to the increasing new supply
for the commercial office space. As a result, competition to win
occupiers is becoming more and more intense among property
owners & developers.
On a positive note, this is leading to better development practices
across the region. The “green concept” in new buildings is gaining
grounds and is becoming a key “influencer” in the occupiers' decision
making process. As supply will overrun demand by an increasing
margin, the prices are expected to fall to 5% from the current levels,
by end of March 2010.
CITY REPORT
MUMBAI OFFICE MARKET - Q4 2009
I3I