Mumbai Inc. shifts to suburban hubs
With the ready availability of affordable commercial real estate all over the city, places such as Lower Parel, Vikhroli, Andheri-Kurla belt, Malad, Mulund and Goregaon have now emerged as favourable office destinations for many companies.Updated: Jul 03, 2013 08:34 IST
With the ready availability of affordable commercial real estate all over the city, places such as Lower Parel, Vikhroli, Andheri-Kurla belt, Malad, Mulund and Goregaon have now emerged as favourable office destinations for many companies.
The trend that started two years back has now gained momentum as companies surrender some of their expensive offices in business districts at Nariman Point and Bandra Kurla Complex (BKC) and shift to these new commercial hubs.
According to real estate experts, the cost is the main reason for this: “Most companies are cost-conscious and they find prices attractive in these places,” said Ravi Ahuja, director of office transactions at Cushman and Wakefield India, a leading real estate consultancy.
Rents charged at Lower Parel — Rs125 to Rs165 per square foot — are much lower than at Nariman Point — Rs225 to Rs275 — or at BKC — Rs270 to Rs285. Andheri is another option with rents at less than Rs110 per square foot.
One prominent firm that has moved out of BKC to Andheri Kurla road is automobile major Volkswagen. Deutsche Bank and Tata AIG have also moved from Lower Parel and Nariman Point to Goregaon.
According to business houses, the workforce is another factor responsible for this shift. “The suburbs are growing and most of the workforce comes from there. So it makes sense to have offices there,” said Nanik Rupani, former president, Indian Merchants’ Chamber, and chairman, Neutron Infotech Private Limited.
The suburbs are seeing a surge in all kinds of businesses, according to builders. “Professionals such as chartered accountants, architects, consultants as well as traders want to set up shop here,” said Naresh Chheda, director of the Happy Home Group, which has constructed a mall at Mulund.
There are two categories of clients moving to the suburbs — those who want larger office spaces and others who want to reduce costs, according to Anuj Puri, country head, Jones Lang LaSalle India, a real estate consultancy:
“We’ve seen a migration of those who want to expand or those who want to cut costs.” However, he added, despite the space crunch, Nariman Point still leads the way as far as commercial real estate goes.
“Most corporate houses choose offices in South Mumbai as it is a major financial centre,” said Puri.
Another major advantage of these new buildings in the suburbs is that, unlike those in Nariman Point, these are huge commercial centres with modern amenities. “These are plush offices where facilities such as car-parking, a cafeteria and gymnasium are provided within the complex,” said Ahuja.