Decades on, Navi Mumbai finally gets major takers for commercial realty
Office rentals here have grown by an average of 9% over the past year, against an average of 1% for the Mumbai Metropolitan Region.real estate Updated: Jun 09, 2017 19:24 IST
It would appear that the Navi Mumbai dream is finally being realised. According to realty consultancy JLL, this region saw the biggest rise in office rentals in the region over the past year, with rents growing at 9% against an average increase of only 1% across the Greater Mumbai region.
Decades after the city was first proposed and built as a means of decongesting Mumbai, the rising rentals indicate that businesses are finally ready to move here — if not for their main offices then at least for a subsidiary branch, if not to decongest Mumbai, then at least to avoid its inflated rates. It helps, of course, that it now takes less time to get to Kharghar than it does to get to Marol. “The recent development of Navi Mumbai has largely been due to the construction of the Sion-Panvel Expressway, the proposed Sewri-Nhava Sheva Trans-Harbour Link and the new airport being built there,” says Ritesh Mohan, national sale head at realty aggregator Magicbricks.com.
The Expressway alone slashed travel time from Sion to Panvel from over an hour to about 30 minutes. “When the trans-harbour link comes up in 2019, it will provide a second corridor for the development of real estate in the city,” Mohan adds.
At the same time, prices, even though they’re rising, remain far below those in suburban Mumbai and even Thane City, especially for commercial real estate. Average rents stand at Rs 59 / sqft / month against an average of Rs 94 in micro markets like the western suburbs and about Rs 211 in Bandra-Kurla Complex. Navi Mumbai offers greater value for money too, because of the large swathes of space still available here.
“Things have certainly changed,” says Gautam Saraf, managing director for Mumbai at realty consultancy Cushman & Wakefield. “Navi Mumbai has been seeing steady activity in the commercial office space, with the Information Technology and Business Process Management sectors driving that growth story. Tax incentives have attracted investments from developers too, further driving interest from MNCs and domestic occupiers.”
A LITTLE HISTORY
Navi Mumbai was first conceived by the architect Charles Correa in the 1960s as the alternative city that would decongest Mumbai and become a city in its own right. Through the 1990s, though, the commute to Navi Mumbai took so long that it found very few takers.
“Poor connectivity was a big issue,” says Pankaj Kapoor, CEO of real-estate research company Liases Foras. “But this changed at the turn of the century, and combined with easier land laws, the situation started improving. The government is now hopeful that the idea of Navi Mumbai will finally work.”
The shift now seems a reality, admits Mohan Ninawe, senior public relations officer with the City & Industrial Development Corporation (Cidco). “Corporate houses are eager to set up office in Navi Mumbai. If not the first office, definitely the second. Setting up of government offices like the Reserve Bank of India and Konkan Bhavan over the past decade have paved the way for this, along with multiple SEZ projects.”
Its geography offers good connectivity to both Mumbai and Pune, adds Ashutosh Limaye, national director of research at JLL India. “It is slated to emerge as an IT and BFSI-backend corridor within the next five-to-ten years. It also enjoys access to talent pools and residential catchments. In the past year alone, companies such as Accenture, UBS and Jacobs Engineering have set up offices here.”
With new job opportunities, one can also expect a rise in demand for residential real estate. “Associated social infrastructure will get a boost, with housing being a key component. Employees will begin buying their first homes here, thus giving the affordable segment in Navi Mumbai a major boost,’ says Ravi Ahuja, executive director for office services & investment sales at Colliers International India.
Last month, in one of the largest office-leasing transactions in MMR this year, IDFC Bank leased an office building spread over 1.80 lakh sq ft in K Raheja Corp’s mixed-use development, Mindspace, in Navi Mumbai’s Juinagar area.
Accessibility and cost-effectiveness are the factors that determined their choice. “Juinagar offers the luxury of space, apt for large workforces. The catchment area has a good pool of talent, and is a well-equipped and a secure urban neighbourhood,” said an IDFC official.