It may not be the bustling central business district it once was but Nariman Point is getting a new life. With a clutch of companies, law firms, foreign consulates and consultancies setting up their offices here, lease rentals have moved up.
This has whetted the appetite of property agents who believe the rentals could climb all the way to over Rs 1,090 per square feet, virtually doubling from the current levels of about Rs 570 per sq ft. To be sure, rentals in the tony Bandra Kurla Complex (BKC) have hit Rs 1,000 per sq ft but companies seem to be re-discovering the benefits — and charm — of being located in Nariman Point. The better connectivity with the 10.58-km Coastal Road and Metro 3 between Seepz and Colaba is a big draw.
Between January and September, leases for 40,000 sq ft of office space have been signed and this doesn’t include leases that have been renewed. Property consultant Cushman and Wakefield expects this could go up to 60,000 sq ft before the year is out. Compare that with just 17,000 sq ft of leases that were closed out in 2023.
This demand for workplaces has driven up rentals by 8-10% in the past one year. They’re ruling at nearly Rs 570 per sq ft having surpassed rentals in the central business districts of both Bengaluru, where it is about Rs 353 per sq ft, and the National Capital region, where it is about Rs 430 per sq ft, property consultant Knight Frank said.
Sanjay Dutt, MD and CEO of Tata Realty & Infrastructure, said some companies are locating their offices in Nariman Point as they need to be close to their corporate clients, BSE and government offices. “Also senior bankers and CXOs have clients and a social network there so they live in South Mumbai ,” he said.
If the space being occupied doesn’t look big compared to the volumes in other business hubs, it’s because the supply in Nariman Point is limited. Gulam Zia , executive director, Knight Frank, pointed out that while many companies are looking for space, there are not too many good buildings. Experts say very little fresh supply has come into the market in the past couple of years.
Among the big deals that have taken place recently, the Consulate General of the Republic of Poland took over 3,000 square feet of office space in Nirmal Building. Earlier this year, German Consulate picked up 7,442 sq ft in Hoechst House. The consulate of China has also opened office in the area.
Top-rung consultancy firms such as The Boston Consulting Group and investment banking firm Jefferies are now working out of Nariman Point, while CJS Speciality Chemicals and Hind Offshore are in the neighbouring Fort area.
Nariman Point, Fort, Ballard Estate and others, the original central business district (CBD) in the seventies, eighties and nineties, lost out to BKC. One by one, top banks and companies shifted to the less-congested and well-planned BKC.
Zia pointed out that Reliance Industries remains as do law firms such AZB & Partners. “The Tatas never moved out of the locality while the family office of Lakshmi Niwas Mittal is also here,” Zia said.
Gautam Saraf, MD, Mumbai at Cushman & Wakefield, said new-age companies and multinationals are stringent on compliance and only a few buildings in Nariman Point have required facilities. Mumbai Metro Rail Corporation’s plan to auction a 4.2-acre plot in Nariman Point is expected to boost the commercial property market in the area, he said. The plot has a development potential of 1.6 million sq ft.
From: financialexpress
Financial News
