Commercial Property in Mumbai sees unprecedented hike!

Mumbai is now not just another metro but much more than that. With acquiring seventh position, behind Moscow and a number ahead of Paris in the list of top 10 cities with expensive office market, and after leaving Manhattan behind in terms of rentals Mumbai has become a haute spot.

Mumbai rentals are escalating beyond imagination. The analysis of Knight Frank says that it is cheaper to lease 1 lakh sq ft of commercial space for $55 per sq ft per annum abroad than to pay $90 for the same in Mumbai. The average per sq ft cost in Nariman Point and Bandra Kurla Complex (BKC) are 1.5 times higher than Manhattan and not only this according to the market trend, the rentals in BKC will rise higher than the existing rates.

Nariman Point is also fetching rentals which are around 1.5 times higher than Manhattan, where the weighted average rental in Manhattan hovers around $60, according to the latest survey.

This game of hiking the rates started a year ago and it seems to be going on forever. The recent lease transaction done by the ABN AMRO Bank is the most expensive in India. The Bank has renewed its lease agreement for commercial space located on the third floor of 12-storey at Nariman Point in Mumbai, at an exorbitant monthly rental of Rs 500 per sq ft.

There are various factors that have contributed to this situation in Mumbai. Few being the bullish attitude on to buy or rent office space in Mumbai of various firms, another factor which has fuelled the prices of commercial property in the city is the is a sharp increase in value of rupee. Also, the shortage of ‘A’ grade office space in Mumbai is another factor pushing the rates.

Indian Real Estate gone from strength to strength, commercial rentals in other cities has increased too, for instance it is Rs 150-200 per sq ft in Bangalore and Rs 60-100 a sq ft in Hyderabad but the growth Mumbai is showing leaves you speechless.




Contributed By : Sumit Patel