The commercial property market in the Mumbai is expected to take a 20-40 % correction according to a recent Jones Lang LaSalle Meghraj report.

In their report, The Slope of the Decent, JLLM explain developers have constructed extensively across cities from 2005 to 2008. However, commercial rentals have started falling and are expected to drop further over the next two years.

The steepest fall has been predicted in Central Mumbai (Worli, Parel, Prabhadevi, Lower Parel, Dadar), Western suburbs (Malad, Goregaon) and Eastern suburbs (Ghatkopar, Vikhroli, Kanjurmarg, Powai). These areas are set to witness high vacancy levels and a sharp decline of rates of 30-40 per cent from its peak levels in 2008. It attributes the high price correction to the oversupply and appreciation that these areas have seen in the recent past.

The suburban areas of Thane and Navi Mumbai, which have seen huge projects being planned as land was available at lower rates than in Greater Mumbai, are expected to be hit next by the slump. Commercial rentals in these areas are expected to fall by 30-35 per cent.

The commercial business districts are set to be the least affected as they have a low supply. However, since rentals in these hubs have reached unaffordable levels (with a growth rate of 250 per cent), the report predicts a 20-25 per cent correction in such places. These include the CBDs of South Mumbai (Nariman Point, Cuffe Parade, Fort, Ballard Estate) and Bandra Kurla Complex.
The report also says the demand for commercial spaces from manufacturing sectors is expected to increase in future.

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Tags: Commercial Property In India, Jones Lang LaSalle Meghraj, Property in Mumbai

This entry was posted on Tuesday, April 7th, 2009 and is filed under Commercial Property In India, Property in Mumbai. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.