The office market of Mumbai experienced a notable increase in leasing activity, reaching approximately 7.4 million square foot (msf) marking a 16.3% YoY growth in the year 2023, according to Knight Frank India’s latest report titled ‘India Real Estate: Residential and Office (July – December 2023)’. The leasing landscape was predominantly shaped by a significant presence of BFSI (Banking, Financial Services and Insurance) firms. Mumbai’s trajectory in office leasing has consistently shown improvement, reaching its highest transaction volume since 2020. India-facing business accounted for most transactions, contributing around 78% to the overall share in 2023.
Mumbai has experienced a significant influx of new supply driven by heightened office transactions and increased confidence among developers. The total supply added during the year amounted to 3.1 msf, reflecting a substantial YoY increase of 51.6%.
The report also highlights that Mumbai continued to be the largest residential market in the country, as the city recorded the highest residential sales compared to other metros. Mumbai’s residential market recorded sales of 86,871 units in 2023 marking the highest sales volume in the last 11 years. To capitalise on the strong sales momentum, developers added new supplies in the market, recording a YoY rise of 3% with 93,051 new units launched in 2023 which was highest since 2014.
Office market update for 2023
The notable increase in leasing activity within Mumbai’s office market is attributed to optimistic market sentiments and significant investments in improving infrastructure. The office transaction volumes in Mumbai in 2023 reached their highest point in the past three years, recording 7.4msf of office transactions, reflecting a YoY growth of 16.3%. The new office supply in Mumbai commercial market for the year 2023 saw a robust increase of 51.6% YoY, totaling 3.1 msf due to increased office transactions and enhanced developer confidence. Approximately 40% of the new office launches were concentrated in the SBD West micro market, followed by PBD with 20%.
| Parameter | 2023 | 2023 Change (YoY) |
| Completions (in msf) | 3.1 | 51.6% |
| Transactions (in msf) | 7.4 | 16.3% |
| Average transacted rent (in Rs/sqft/month) | 114 | 3.6% |
Office market trends 2023: End-user categories
In terms of the end-use split of office spaces transacted, India-facing business dominated more than half of the commercial market in Mumbai occupying 77% of the area. In 2023, 5.8 msf of area was transacted by India-facing business, which when compared to 2022, has seen a slight jump from 5.3 msf of area transacted. This was followed by GCC occupying a share of 10%, flex office spaces at 8% and third-party IT services at 3%.
| End-User Licencee/Buyer | India-Facing Business | GCC | Flex | Third Party IT | Total |
| Area transacted (in msf) | 5.8 | 0.8 | 0.6 | 0.2 | 7.4 |
Office rent trends 2023
Rents in Mumbai office market have demonstrated a consistent upward trend, indicating stable growth post-pandemic. In 2023, rents witnessed a YoY growth of 3.6% with average transacted rent recorded at Rs 114 per sqft per month.
| Rental value range in H2 2023 (Rs/sqft/month) | 12-month change | 6-month change | |
| BKC & Off-BKC | 176-315 | 2.5% | 0.5% |
| CBD & Off-CBD | 142-232 | 2.9% | 0.5% |
| Central Mumbai | 110-200 | 3.2% | 0.5% |
| PBD | 49-90 | 3.9% | 1% |
| SBD Central | 80-180 | 3.6% | 1% |
| SBD West | 74-130 | 2.7% | 0.5% |
Mumbai residential market update for 2023
Mumbai continued to be the largest residential market with both sales and new launches increasing in 2023. The residential market recorded a 2% YoY increase in sales, reaching 86,871 units in 2023. Sales in this market was predominantly concentrated in Peripheral Central Suburbs. Developers launched 93,051 units in 2023, marking a 3% increase from the units launched in 2022. Most of the launches were concentrated in the micro-market of Peripheral Central Suburbs during 2023 representing 30% of the total launches. The latter half of 2023 saw an accelerated improvement in sales registering a 12% YoY growth compared to the first six months. This upswing was predominantly fuelled by heightened demand during festive periods like Navratri, Dussehra, and Diwali. These traditional festive seasons typically experience a surge in real estate activities due to positive sentiments, coupled with developers strategically launching new projects and providing attractive payment plans.
| Parameter | 2023 | 2023 Change (YoY) |
| Launches (housing units) | 93,051 | 3% |
| Sales (housing units) | 86,871 | 2% |
| Average price per sqft | Rs 7,883 | 7% |
Mumbai residential market trends 2023: Home price ticket categories
In 2023, a substantial portion of properties transacted in Mumbai fell within the affordable segment group. However, the share decreased from 49% in 2022 to 45% in 2023. Notably, there was a shift towards the Rs 5 million-10 million category, with its share increasing to 31% as opposed to 27% in 2022. Meanwhile, the category encompassing properties valued at over Rs 10 million remained stagnant at 24% when compared to 2022.
During 2023, the city witnessed a growth of 4% YoY in sales of units priced above Rs 10 million. The ticket size Rs 5 million-10 million saw a growth of 15% YoY while that below Rs 5 million observed a drop of -6%.
| Ticket Size Categories | Under Rs 5 million | Rs 5-10 million | Over Rs 10 million | Total |
| 2023 | 39,093 | 26,610 | 21,167 | 86,871 |
| YoY % change | -6% | 15% | 4% | 2% |
Shishir Baijal, chairman and managing director at Knight Frank India, said, “Mumbai residential market remained robust, primarily driven by strong consumer demand. This enduring trend is fuelled by several factors, including a favourable economic outlook, a rise in disposable income among prospective home buyers, a growing inclination towards larger dwellings, and a fear of losing out on property investments in the nation’s largest real estate market due to consistent price hikes. The trajectory of the Mumbai residential market appears set to maintain its upward momentum, driven by unwavering consumer demand. Anticipated to play a pivotal role in sustaining this demand are ongoing infrastructural development projects, the upward trajectory of prosperity, and the evolving preferences of consumers in the foreseeable future.”
Mumbai residential market price trends 2023
In terms of residential prices, Mumbai witnessed an annual growth of 7%, reaching a weighted average price of Rs 7,883 per sqft. The Peripheral Western Suburbs and western suburbs of Mumbai micro market saw maximum residential price appreciation of 8%.
| Location | Micro-market | Price range in H2 2023 (Rs/sqft) | 12-month change | 6-month change |
| Lower Parel | Central Mumbai | 26,000-37,440 | 4% | 1% |
| Worli | Central Mumbai | 57,200-78,000 | 4% | 2% |
| Ghatkopar | Central Suburbs | 12,600-23,100 | 5% | 2% |
| Mulund | Central Suburbs | 12,480-22,880 | 4% | 3% |
| Powai | Central Suburbs | 18,020-31,800 | 6% | 2% |
| Panvel | Navi Mumbai | 4,028-7,950 | 6% | 3% |
| Kharghar | Navi Mumbai | 7,420-9,752 | 6% | 2% |
| Vashi | Navi Mumbai | 12,480-24,960 | 4% | 2% |
| Badlapur | Peripheral Central Suburbs | 2,996-4,815 | 7% | 2% |
| Dombivali | Peripheral Central Suburbs | 5,350-9,095 | 7% | 2% |
| Mira Road | Peripheral Western Suburbs | 6,480-9,936 | 8% | 3% |
| Virar | Peripheral Western Suburbs | 5,350-7,704 | 7% | 2% |
| Tardeo | South Mumbai | 42,400-63,600 | 6% | 2% |
| Ghodbunder Road | Thane | 6,360-12,720 | 6% | 2% |
| Naupada | Thane | 14,700-25,200 | 5% | 2% |
| Andheri | Western Suburbs | 15,900-27,560 | 6% | 3% |
| Bandra (W) | Western Suburbs | 53,500-74,900 | 7% | 2% |
| Borivali | Western Suburbs | 15,120-27,000 | 8% | 3% |
| Dahisar | Western Suburbs | 9,630-17,120 | 7% | 3% |
| Goregaon | Western Suburbs | 14,040-25,920 | 8% | 3% |
| Got any questions or point of view on our article? We would love to hear from you. Write to our Editor-in-Chief Jhumur Ghosh at jhumur.ghosh1@housing.com |
