Absorption rate of Mumbai property is low
The reality of real estate in Mumbai is covered by high prices, low rentals, no absorption, falling demand and an overheated market.
The demand and absorption rate of office space in Mumbai is sluggish for a long time. Though there are few high scale of sale is happening in the office space section, the overall scenario is not good at this moment.
The research report showed that transaction activity in the real estate properties in Mumbai was subdued in the final quarter of the financial year.
The vacancy levels also have increased from 14 percent in 2009 to 20.6 percent in Q1 2012. And nearly 40 million square feet of office space is lying vacant in Mumbai.
In Mumbai, the lack of absorption is three times the size of Nariman Point, which is what is putting so much pressure on the rental value.
Key buildings that have major vacancy levels in Lower Parel are Peninsula Business Park A and B where 83 percent and 70 percent space is yet to be leased.
Developers have now lowered rentals while some are also looking at outright sales of buildings as against leasing them.
Renting or purchasing a home in Mumbai
Source: First post
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