The Indian real estate market has seen a significant surge in commercial activity, with Mumbai’s office market recording a historic high in transaction volumes for the year 2024. According to Knight Frank India, the city’s office market achieved a remarkable 40% year-on-year (YoY) increase in transaction volumes, reaching 10.4 million square feet, surpassing the previous year’s 7.4 million square feet.
**Strong Leasing Activity Drives Growth in Mumbai’s Office Market**
The second half of 2024 witnessed a 9% YoY growth in office space transactions, totaling around 4.6 million square feet. This surge in leasing activity was primarily driven by a solid pipeline of deals across multiple sectors, with transactions led by India-facing businesses. The city’s status as a major commercial hub was reinforced as the growth marked the fifth consecutive half-yearly increase in transaction volumes since H2 2020.
**India-Facing Businesses Take Center Stage in Mumbai’s Office Transactions**
India-facing businesses accounted for the majority of transactions in Mumbai, contributing around 77% to the overall share in 2024. This significant share was driven by a YoY growth of 37% from 5.8 million square feet in 2023 to 7.9 million square feet in 2024. Other notable segments include flex office spaces, occupying a share of 12%, driven by the growing popularity of hybrid work models, followed by GCC’s at 7%, and Third-Party IT services at 4%.
**New Office Supply Sees Robust Increase in Mumbai’s Commercial Market**
The new office supply in Mumbai’s commercial market for the year 2024 witnessed a robust increase of 89.2% YoY, totaling 5.8 million square feet. A significant portion of this supply was delivered in the Suburban Business District (SBD) West, in line with the increasing demand for submarkets offering premium spaces and enhanced connectivity.
**Rentals in Mumbai’s Office Market Experience Steady Growth**
Rents in Mumbai’s office market experienced a steady growth trajectory with a YoY increase of 3.5%. The average transacted rent recorded at INR 118 per square foot per month in 2024. The operationalization of new metro lines and other infrastructure upgrades have significantly bolstered occupier confidence and demand for premium locations.
