City among the top five cities globally to add maximum office space in the next 18 months
Mumbai is among the top-five cities globally that will see the maximum addition to its office footprint in the next 18 months, according to a recent JLL report. Mumbai figures after Shanghai, Mexico City and Beijing – among 99 cities studied globally. The financial capital of India is expected to add up to 14 per cent of its current stock to grow its office footprint.
As the current total of Grade-A offices in the city is 109 million sq ft, a stock of about 16 million sq ft could be added in the next one and a half year as per construction schedules announced by developers. There is a probability of delays, based on historic trends, in which case the supply figure could be around 13 million sq ft, which is also significant.
Interestingly, in this survey covering all office sub-markets in each city, the markets from emerging economies figure prominently in the top-10 list. Shanghai comes on top with 37 per cent of its current stock to be added in the next 18 months, followed by Mexico City and Beijing adding 18 per cent and 16 per cent respectively.
The other cities from emerging economies that figure in the top-10 list include Sao Paulo (7 per cent) and Moscow (6 per cent). Cities from mature economies figuring in the top-10 lists are Tokyo, Singapore, San Francisco and London. Tokyo is expected to add 11 per cent of its current stock through 2018 followed by Singapore (10 per cent), San Francisco (7 per cent) and London (slightly less than 5 per cent).
What’s expected in Mumbai?
While Mumbai’s supply pipeline consists of office projects launched years ago, it remains to be seen whether they would all get constructed over the next 18 months. Also, the supply pipeline could dry up in the existing business districts over the next two to three years while a major chunk would come up in the emerging business districts and will, therefore, not help much.
For example, a look at the core BKC area and SBD-Central (Lower Parel, Elphinstone Road, etc.) reveals that only 2.5 million sq ft – out of the 13-16 million sq ft that will enter the market through 2018 – would be in the key demand areas while an overwhelming majority of the rest will come up in the upcoming locations.