The commercial real estate sector plays a crucial role in the functioning and economy of any metropolis, with its significance being even more pronounced in a city like Mumbai. Comprising properties such as office spaces, retail establishments like shopping centers and high-street shops, and industrial, technology, and warehousing properties, the commercial real estate sector is valued at an estimated ?2 trillion.
Furthermore, Mumbai is home to India’s largest office space market, which is spurred by the presence of a plethora of domestic and multinational companies engaged in banking and finance, pharmaceuticals, shipping and importing, information technology, healthcare, and media, to name a few.
Apart from income demand, Mumbai’s working population is estimated to increase from five million in 2019, with 20 million registered migrants annually, to nine million by 2030, thereby significantly increasing demand in the commercial real estate sector, which has the third-highest international passenger traffic in the world.
Most of India’s commercial real estate stock is situated in Mumbai, home to master-planned central business districts and special economic zones that cater to different sectors.
Most market development has occurred in 1920s Mumbai, while smaller infill developments have taken place in the suburbs and towns of the 1960s and 1970s, such as Bandra-Kurla Complex, Lower Parel, Andheri, and Goregaon, with new business districts more recently emerging in mill districts such as Parel and Elphinstone, and the erstwhile textile towns of Thane, along with integrated townships featuring IT parks and SEZs in Navi Mumbai.
The primary stakeholders in the Indian commercial property market typically include three different entities: developers, institutional investors, and quasi-governmental institutions. The construction and selling prices of real estate in Mumbai have increased by 16.17% and 15.23% annually from 2015 to 2019, respectively. Other transaction costs include cess and surcharges, stamp duties, and local body taxes. The accelerated price appreciation has made current and new investors, including some marginal developers, more willing to offer purchased and leased properties for outright or joint venture redevelopment.(more)
