Corona effect: Commercial realty in Mumbai down 62%

New Delhi: Major west Indian cities, particularly Mumbai and Pune, saw the demand for office property almost half in 2020 calendar year as compared to 2019.

While Mumbai saw a drop of whopping 62 percent in gross office space absorption in 12 months of 2020, Pune witnessed downside of 60 percent, according to a report by Colliers India

The fall in Mumbai and Pune was due to the longest and most stringent lockdown implemented in Maharashtra.

The vacancy levels in Mumbai for office space remained at 13.5 percent in 2020. The same was 9.5 percent for Pune.

However, thing are looking up in both the cities in the last 3-4 months. “The office market in Mumbai is seeing resilience. Owners of commercial properties have lowered their returns expectations, which is a good sign. Investors should keep their return expectations reasonable for a sustainable growth. Recovery to the pre-Covid levels will depend on stable government policies, at both state and central level and incentivising corporates to grow and hire,” said Sangram Tanwar, MD- Office Services-Mumbai, Colliers India.

Animesh Tripathi, Senior Director-Office Services-Pune, Colliers India added, “The impact of the current adversities on the commercial office sector doesn’t seem very significant when compared with the decadal average of absorption i.e., 4.5 million sq. feet per year. The leasing activities in 2021 is expected to be majorly driven by sectors like Information Technology followed by Healthcare & E-commerce.”

The overall gross absorption of office space declined by 41 percent in 2020 at a total of 34 million square feet in the top six cities in the country.