Amid growing bearish sentiment impacting corporate growth strategies in the financial heart of the country, there has been a notable downturn in the uptake of commercial real estate by Indian firms. On the contrary, multinational corporations (MNCs) have seized a remarkable amount of office space within the city.
A recent study conducted by the property advisory firm DTZ illustrates the changing landscape of commercial real estate occupancy in Mumbai. By comparing data from the first quarter of 2012 to the same timeframe in the preceding year, significant shifts in the composition of commercial real estate occupants have emerged. During the period from January to March 2012, Indian corporate entities represented only 29 percent of new commercial realty occupants in Mumbai. This marks a stark decline from the 71 percent share they maintained during the corresponding timeline in 2011.
On the flip side, companies based in the United States and Europe accounted for a mere 5 percent and 18 percent of the office space occupancy in the first quarter of 2011, respectively. However, recent figures reveal a surge in their market share to 32 percent and 23 percent respectively, in the same quarter this year.
Rohit Kumar, the research head at DTZ, emphasized in his analysis that the quarter-on-quarter and year-on-year office space absorption illustrates a pronounced increase in the market shares of MNCs from the USA and Europe, while Indian firms have faced a drop. "Whether in IT, ITES, or the Banking, Financial Services, and Insurance sectors, MNCs find India to be relatively affordable in terms of labor and real estate costs. Conversely, despite the positive growth signals originating from the US and Europe, Indian firms seem to take a more conservative approach, wary of the potential return of recession," Kumar remarked.