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Financial capital of the country, Mumbai has witnessed a net absorption of 0.61 million square feet for office spaces in Q2 calendar year 2021, an increase of 36% when compared to Q2 2020, showed latest data by JLL, an international property consultant.

On a sequential basis, the city has recorded more than double net absorption, from the 0.24 million sq. ft as seen in Q1 2021.

Sector-wise, BFSI, manufacturing and flexible space operators dominated leasing activity during the quarter. “As demand for flex spaces grows, flex space operators are expanding their presence in the city," Karan Singh Sodi, regional managing director, JLL India.

According to analysts at Edelweiss Securities Ltd, with the pandemic-induced volatility playing havoc, many start-ups, as well as large enterprises, are evaluating flexible workspaces to meet their space needs over the next couple of years.

"We believe a combination of flexibility and capital conservation provided by the segment is particularly useful in an uncertain world. With corporates, as well as employees, viewing co-working positively, we believe flexible workspaces will gather momentum going ahead," the domestic brokerage house said in a report on 14 July.

The JLL report further added that in terms of locations, Navi Mumbai, Thane and SBD North (mainly Andheri-Kurla Road) were the preferred locations, driving leasing activity in Mumbai. In Q2 2021, these three submarkets accounted for nearly 80% of the overall net absorption, said JLL.

Nevertheless, net absorption levels in Mumbai remain below the quarterly average of 1.54 million sq. ft witnessed between 2016-19. Also, while the overall city rents have been stable, rents are expected to witness steady growth once the market stabilizes post recovery from the impact of covid, he added.

Meanwhile, the quarter also saw robust new completions of 2.54 million sq. ft with three new projects getting completed. As new completions outpaced net absorption, the vacancy rate increased by 110 basis points to 16%. One basis point is one-hundredth of a percentage point.

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