Signalling bad times for the real estate market, Nariman Point, the city’s premier business district, has dropped seven places and ended on the 15th position in the list of world's most expensive office locations. The list, compiled by global property consultants Cushman and Wakefield, had placed Nariman Point at the 8th position last year.
The change in ranking is an indication of the slump in commercial real estate market in the city.
Landlords in the south Mumbai business district are fighting competition from other commercial hubs like Bandra-Kurla Complex (BKC) and Lower Parel.
“There is a diminishing interest in Nariman Point on account of higher prices, lower quality and ageing buildings,” said Ravi Ahuja, executive director, Cushman and Wakefield (India). “In contrast, you get superior quality of construction with bigger space in BKC and Lower Parel,” he pointed out.
Currently, a 1,000 sq ft office at Nariman Point commands a monthly rent of Rs2.75 lakh, which is lower than the Rs3 lakh that it fetched a year ago. This is at par with the rent for a similarly-sized BKC office, which is likely to have modern amenities as a deal-sweetener.
“Large companies prefer all operations under one roof and this is possible in BKC,” said Sunil Mantri, chairman, Indian Merchants Chamber (Real Estate Committee). “Both BKC and Lower Parel also offer good parking facilities unlike Nariman Point,” he added.
Companies are also increasingly relocating to the Andheri-Kurla belt as it houses several firms providing information technology services and back-office support.