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An Open Letter To Mumbai’s Commercial Space Developers

Byron Perry Property Report
An Open Letter To Mumbai’s Commercial Space Developers - commercial property - developer - Mumbai - India

We are looking at a potential situation in Mumbai’s office space market where many locations are likely to edge into oversupply, with vacancies escalating over the next couple of years. As a real estate professional, one cannot help but observe this state of affairs with misgivings. Can the situation be remedied?

Probably not entirely – after all, one cannot just wish a glut of projects away. Close to 26 million square feet of new office space are expected to hit the market over the next 24 months on account of number of new project completions in SBD Central and Navi Mumbai, and vacancy levels are going to rise to 25% + as compared to the 3% in 2007. Mumbai’s office space market will clearly favour tenants and this trend is likely to continue for a while.

However, there certainly are some remedial actions that commercial real estate developers can take to attract tenants even in such circumstances. Understandably, occupiers now expect more rights and consideration in the current scenario. The key to attracting them is to offer greater transparency and regulatory compliance, since these have always been a source of discontent on the Mumbai commercial real estate front.

Ideally, developers should offer their tenants the first right of refusal and hard and soft options to expand within the same project. Other facilities that make a big difference in such a competitive market is lower deposits and a rent-free period during the fit-out period, or if the delivery is delayed for any reason.


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Disclaimer: The information presented and opinions expressed herein are those of the authors and do not necessarily represent the views of Estates Report and/or its partners.