Office leasing volumes in Mumbai witness historic high in 2024: Knight Frank India

Office leasing volumes in Mumbai witness historic high in 2024: Knight Frank India

• The city recorded 10.4 mn sq ft of office transactions in 2024
• India facing business leads the office spaces transactions in the city
• New completions grew by 89.2%, 5.8mn sq ft of new office supply in 2024

Mumbai, January 07, 2025: Knight Frank India in its latest report, India Real Estate: Residential and Office (July - December 2024) cited that Mumbai's office market continued its strong momentum, driven by high leasing activity, increased new supply, and steady rental growth. The city recorded a historic high in office transaction volumes in 2024, reaching 10.4 mn sq ft, marking a 40% YoY increase from 7.4 mn sq ft in 2023.

In the second half of 2024, Mumbai saw office space transactions totalling around 4.6 mn sq ft, reflecting a 9% YoY growth. This surge in leasing activity was driven by a solid pipeline of deals across multiple sectors, with transactions led by India-facing businesses. H2 2024 also marked the fifth consecutive half-yearly increase in transaction volumes since H2 2020, reinforcing the city’s status as a major commercial hub.

India facing business accounted for most transactions in Mumbai, contributing around 77% to the overall share in 2024.In 2024, Mumbai saw the addition of 5.8 mn sq ft of new office supply, reflecting an 89% year-on-year growth compared to 2023. A significant portion of this supply was delivered in the SBD West, in line with the increasing demand for submarkets offering premium spaces and enhanced connectivity.

Office Market Update 2024: January – December 2024

In 2024, Mumbai recorded total leasing volumes of 10.4 mn sq ft, a 40% YoY increase, marking its best annual performance in over a decade. India facing transactions were the major contributor, followed by flex transactions. This sectoral diversification highlights the city’s capacity to meet the diverse needs of occupiers.

Mumbai Office Market Summary

Parameter	2024	2024 Change (YoY)
Completions in mn sq ft	5.8	89%
Transactions in mn sq ft	10.4	40%
Average transacted rent in INR/sq ft/month	118	4%

Note: 1. 1 square metre (sq m) = 10.764 square feet (sq ft), Source: Knight Frank Research

The new office supply in Mumbai commercial market for the year 2024 saw a robust increase of 89.2% YoY, totaling 5.8 mn sq ft out of which 1.6 mn sq ft was introduced in H2 2024. The majority of this supply was concentrated in SBD West, reflecting the increasing demand for submarkets that offer premium spaces and better connectivity.

End-User Categories

In terms of the end-use split of office spaces transactions, India Facing Business dominated more than half of the commercial market in Mumbai occupying 77% of the area. In 2024, 7.9 mn sq ft of area was transacted by India Facing Business which when compared to 2023 was 5.8 mn sq ft of area transacted witnessing a YoY growth of 37%. This was followed by Flex office spaces occupying a share of 12% which was driven by growing popularity of hybrid work models, followed by GCC’s at 7%, and Third-Party IT services at 4%.

Transaction volume across end-user occupiers

End-User Licensee/Buyer	India-Facing Business	Flex	GCC	Third Party IT	Total
Area transacted in mn sq ft	7.9	1.3	0.7	0.5	10.4

Source: Knight Frank Research

Viral Desai, Senior Executive Director - Occupier Strategy & Solutions, Industrial & Logistics, Capital Markets and Retail Agency, Knight Frank India, said, “In 2024, occupier sentiment remained strong, fuelled by a growing economic environment, rising physical occupancy, and significant infrastructure advancements. The introduction of key metro lines, such as the BKC metro, has notably enhanced accessibility, making Mumbai’s office market increasingly attractive to occupiers. The city’s office leasing market is set to continue its upward momentum in 2025, driven by varied occupier demand, infrastructure-led development, and developer confidence in the city’s long-term prospects. Mumbai’s ability to adapt to shifting workplace trends and cater to evolving occupier needs solidifies its position as a leading commercial hub”.

Office Rent

Rents in Mumbai’s office market experienced a steady growth trajectory with a YoY increase of 3.5 % with average transacted rent recorded at INR 118 sq ft per month in 2024. The operationalization of new metro lines and other infrastructure upgrades have significantly bolstered occupier confidence and demand for premium locations.

Business District-Wise Rental Movement

	Rental value range in H2 2024 in INR/sq ft/month	12-month change	6-month change
BKC & Off-BKC	200-370	4%	2%
CBD & Off-CBD	185-255	3%	2%
Central Mumbai	166-237	4%	2%
PBD	50-90	3%	-
SBD Central	113-200	3%	2%
SBD West	88-170	3%	2%

Source: Knight Frank Research