Net absorption up approximately 14% q-o-q

• The quarter recorded the most quarterly net absorption for the year at 2.10 million sq ft. Strong demand was visible in SBD North, Eastern Suburbs and Navi Mumbai. Full-year absorption reached a ten-year high at 7.07 million sq ft, indicating robust market performance.
• Occupier activity, in terms of gross leasing, was dominated by BFSI with 40%, followed by flex with 22.5%.

Supply addition jumps 49% y-o-y

• The quarter saw 1.65 million sq ft of new supply. Annual supply in 2024 reached 7.6 million sq ft, primarily concentrated in Western Suburbs, Eastern Suburbs and SBD North, reflecting robust development activity in these submarkets.
• Overall vacancy fell 50 bps q-o-q to 12.5%, due to strong demand and reduced new supply vs the previous quarter. This is also the lowest vacancy level for the city in the last 15 years, signalling tightening market conditions with absorption outpacing completions.

Rents up by 1.9% q-o-q

• Rents increased by 1.9% q-o-q in Q4 2024 and 5% y-o-y. Western Suburbs, SBD BKC and SBD Central saw the largest yearly growth with an increase of 8.9%, 6.4% and 6.2%, respectively.
• In Q4, capital values rose 2.6% q-o-q and 7.9% y-o-y, with SBD BKC commanding the highest capital values. Market yield remained stable q-o-q at 8.7% overall but compressed by 20 bps y-o-y.

Outlook: Office absorption projected to maintain momentum

• Near-term supply of 7-8 million sq ft is expected, led by SBD North, Eastern Suburbs and Thane. BFSI, co-working and manufacturing are expected to drive demand momentum, while quality supply will support rent growth projections.
• Infrastructure improvements are likely to fuel suburban market growth and revive older commercial clusters. Net absorption is expected to remain healthy, keeping the vacancy range bound.