1 per cent year-on-year has been recorded in Andheri East and Kalina micro-markets while western and central Mumbai, witnessed marginally increase of 1-2 per cent year-on-year. This year most of the companies were rather focusing on relocations or consolidation with lower rentals mindset.
In 2013, there will be limited new supply add to the stock in 2014. Including deferred projects, the new supply expected in 2014 will be approximately 4 million sq ft. Most of this supply will be located in suburban and peripheral micro-markets such as, Andheri, Goregaon, Malad and Bandra Kurla Complex (BKC).
A limited development pipeline should help to constrain any growth in vacancy rates; however, rental values will remain stable in nearly all micro-markets barring those where vacancy rates are already much higher than the city's average, like Navi Mumbai and Thane. Andheri, BKC and Lower Parel will continue to interest occupiers; however the CBD will continue to lose share due to lack of availability of large floor plates, infrastructure, and distance from residential pockets in the city.
As in 2013, landlords will be willing to offer greater incentives in 2014, rather than lowering base rentals. Numerous clients that have searched for an office space in 2013 will likely take up new space in 2014 post the national elections hoping for a more inspiring economic trend and improvement of sentiments.
The author is Associate Director, Research, Colliers India