Mumbai Office Market Driven By BFSI Sector

Mumbai Office Market Driven By BFSI Sector

Mumbai, financial capital of India, continues to be BFSI’s favourite as compared to other metros. The primary driver of office real estate in Mumbai is BFSI (Banking, Financial Services and Insurance) followed by IT/ITeS, infrastructure, media, healthcare sectors.
BFSI is concentrated in the key business districts of Nariman Point, Lower Parel and Bandra Kurla Complex (BKC). The average capital values prevailing at BKC are Rs 25,000-32,000 per sq ft and the average monthly lease values are Rs 250-300 per sq ft a month at BKC. While, Nariman Point, the original Central Business District (CBD) commands Rs 500 per sq ft a month and Lower Parel commands Rs 400 per sq ft a month.
According to DTZ spokesperson, “Mumbai is BFSI’s favourite. Though occupiers indicated willingness to cut occupation cost, they seemed highly unlikely to compromise on the quality of office infrastructure. More than half of the occupiers (58%) indicated that they want to lease Grade A buildings only.”
Slowdown persists in Mumbai’s office real estate. Most corporates are adopting a ‘wait-and-watch’ policy, which will lead to a slowdown in expansion plans across industries and thus a more moderate overall take-up in 2012, according to DTZ.
However, companies do not want to compromise on quality of real estate. Corporates are very keen on Grade A real estate and efficiency of building. Once the location has been identified, the next step in the process of finalizing office space is building selection. ‘Efficiency of the building’ is the most important criterion followed by ‘CAM (Common Area Maintenance) charges’. The higher the efficiency of the building, the better it is for the occupier as it gives them more usable area (excluding the area occupied by elevators, equipment, hallways, lobby, restrooms etc).
IT and ITes companies require large floorplates and hence are preferring the suburbs and peripheral locations. According to Vivek Talwar,MD – NITCO who launched Nitco biz park, an IT building at Thane two years back, says, “Nitco Biz Park is an IT building, directly attracting IT/ITES companies. Such companies, able to obtain IT certification, can avail IT-driven rates in the area as well as reduced costs of stamp duty, registration and electricity.” He adds that average standard floor plate is 25,000 sq ft carpet.

Source : MagicBricks

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