The Growing Demand for Office Spaces in Pune and Mumbai
Pune witnessed one of the best years in terms of leasing activities and Mumbai saw absorption of 15.85 million sq.ft of office space in the year 2024.
In Pune leasing of around 7.5 million sq.ft of office space, an impressive 20% growth YoY. Based on the active demand in the market, Flexible Workspace and IT-BPM sectors are anticipated to drive the leasing activity in the upcoming quarters. Sector-wise, IT – BPM continue to be the major demand drivers with 55% share followed by Engineering and Manufacturing sector and Co-working space with 25% and 15% share respectively.
Demand and Supply in commercial Market of Pune in million sq.ft
Supply
Demand
Pune witnessed an addition of around 6.5 million sq.ft of space in the year 2024 matching the supply of year 2022. Another 10 million sq.ft of space is expected to be added by the year 2025. Most of this upcoming supply is expected in key micro-markets of Baner, Bund Garden and Kalyani Nagar.
RENTAL TRENDS IN PUNE COMMERCIAL MARKET INR / SQ.FT / MONTH | ||
AREA | 2024 | 2023 |
CENTRAL PUNE | 110-125 | 95 |
WEST PUNE | 90-100 | 85 |
EAST PUNE | 80-95 | 70 |
The vacancy remained high in the range of 20-25% in most micro-markets. The rental values have remained stable in most micro-markets with marginal growth in prime IT/ITeS hubs. Healthy supply has induced stable rentals across submarkets. The rental values are expected to largely remain range-bound in the upcoming quarters.
MAJOR DEALS IN COMMERCIAL MARKET - YEAR 2024 | ||||
CLIENT | BUILDING NAME | AREA (SQ.FT) | LOCATION | LEASE/SALE |
SMARTWORKS | 43 EQ | 6,00,000 | BALEWADI | LEASE |
RISING SUN HOLDINGS | CEREBRUM IT PARK | 2,20,000 | KALYANI NAGAR | SALE N |
CA INDIAN TECHNOLOGIES | WTC | 1,80,000 | KHARADI | LEASE |
HELLA INDIA AUTOMATIVE PVT. LTD | NALANDA SEZ IT PARK | 1,07,700 | HINJEWADI | LEASE |
TSC | RAHEJA COMMERZONE TOWER 3 | 52,300 | YERWADA | LEASE |
WESTERN UNION | BUSINESS BAY TOWER B | 46,000 | YERWADA | LEASE |
EPAM | M AGILE | 30,000 | BANER | LEASE |
INCOMING PROJECT IN COMMERCIAL MARKET | ||||
CLIENT | BUILDING NAME | AREA (SQ.FT) | LOCATION | COMPLETION |
ADITYA SHAGUN INFINITY | ADITYA SHAGUN INFINITY | 30,00,000 | BANER | JAN -25 |
SOLITAIRE BUSINESS HUB | SOLITAIRE BUSINESS HUB | 2,00,000 | BANER | JAN -25 |
AMBROSIA GALAXY | AMBROSIA GALAXY | 2,00,000 | BANER | MAR -25 |
LA COMMERCIA | LA COMMERCIA | 1,20,000 | BANER | JAN -25 |
AAIJI CAPITAL | AAIJI CAPITAL | 1,00,000 | BANER | JUNE -25 |
7 BUSINESS SQUARE | 7 BUSINESS SQUARE | 35,000 | SHIVAJI NAGAR | JUNE -25 |
On other hand Mumbai’s office market has shown a remarkable growth with increase of 20% leasing activity Y-O-Y. The technology sector led the leasing activity with 45% of the total space absorbed.
The Banking, Financial Services and Insurance (BFSI) sector followed at 20% and flexible workspaces captured 18%-
Coworking space operator, WeWork India has leased 1.26 lakh sq.ft of commercial space in the Powai area of Mumbai for a monthly rent of Rs 1.38 crore. Large deals (over 100,000 sq.ft) remained dominant in overall leasing activity this year, contributing to 40% of all transactions.
Demand and Supply in commercial Market of Mumbai in million sq.ft
Supply
Demand
Coworking space operator, WeWork India has leased 1.26 lakh sq.ft of commercial space in the Powai area of Mumbai for a monthly rent of Rs 1.38 crore. Large deals (over 100,000 sq.ft) remained dominant in overall leasing activity this year, contributing to 40% of all transactions. Mumbai added around 5.0 million sq.ft of new office space supply during the year 2024. Close to about 3.6 million sq.ft of total supply is expected to be completed by 2025.
The supply is largely concentrated in suburban markets of Andheri Kurla and Malad, Goregaon. Rentals saw appreciation in most micro markets of 3-5% y-o-y increase due to brisk demand and limited supply.
City-wise market rentals have seen a slight uptick of 6% on y-o-y basis due to healthy demand particularly in submarkets such as Powai, Malad Goregaon and Worli. Going forward, with a healthy demand outlook and a drop in vacancy, the city rentals may improve across some of the key sub-markets.
Real estate market demonstrated exceptional performance in the year 2024, achieving record-breaking leasing across all real estate segments driven by robust demand, diversified growth and investor optimism.
Significant foreign investments and expansions by Multinational Corporations have been further fuelling the sector’s growth trajectory.