Knight Frank Report Highlights Mumbai's Commercial Realty Performance
Knight Frank reported that Mumbai's commercial real estate market has surpassed the performance of the National Capital Region (NCR). According to the property consultant's report, Mumbai stands out as a more attractive investment destination for commercial realty compared to NCR.
Central Mumbai Leading the Way
The recent report by Knight Frank indicates that Central Mumbai has outperformed the NCR in terms of office space investments. Mumbai's commercial real estate market promises investors an impressive 19 percent net annual return.
Projected Growth in Property Prices and Rentals
The report also forecasts that property prices in Mumbai are set to increase by 63 percent. Similarly, rental values are expected to grow by 47 percent.
Comparative Performance with NCR
In contrast, investments in the NCR commercial real estate market are projected to yield around 10 percent returns annually. Locations like Noida and Gurgaon are expected to provide similar returns, averaging around 11 percent yearly.
Expert Insight from Knight Frank
Samantak Das, the chief economist at Knight Frank India, confirmed that investments in Mumbai's commercial realty offer the highest returns, estimated at 19 percent. Das further highlighted that the Central District of Mumbai, which includes Dadar, Parel, Lower Parel, and Prabhadevi, will deliver the best returns for investors.
Broader Market Analysis
The property consultant also revealed that investments in Mumbai's Secondary Business District-West (SBD-West) would yield around 15 percent returns.
Key Factors Driving Mumbai’s Commercial Realty
Several factors contribute to the robust performance of Mumbai's commercial real estate market, including:
- Favorable business conditions
- Availability of skilled talent
- Easy connectivity to the rest of the world through airports
- Presence of stock and commodity exchanges
- Headquarters of prominent banks
Sector-wise Office Space Absorption
Approximately one-fourth of the office space absorption in Mumbai is attributed to the IT and ITeS sector. Another one-fourth is accounted for by the banking, financial services, and insurance sector. The report further notes that the demand for office space in both NCR and Mumbai is expected to rise in the coming years.