Commercial realty back in business in Mumbai

Commercial realty back in business in Mumbai
The Hindu Business Line, January 17, 2010, Page 13

Developers are going the extra mile to showcase their projects.

S. Shanker

Commercial real estate may not have got over the slowdown blues, but it has not stopped developers from showcasing innovative designs to draw their clientele.

Kanakia Spaces, which has just about completed its 1.2 million sq.ft project costing Rs 380 crore in Andheri, Mumbai, claims to have the largest single floor plate of 1.60 lakh sq.ft (0.7 km long; and more than 3.5 acres) in the country.

The eight-floor complex shaped like a boomerang on about 10 acres also boasts of a 3,500 sq.ft vertical garden at its 40 ft tall entrance lobby. A 1,000 sq.m pond is being created close to the gate to match the lush walled green inside.

Of a total plot area of 32,481 sq.m, the garden area (outside) is 4,693 sq.m along with a paved spread of 6,620 sq.m. The building expanse covers 5,231 sq.m. Two floors of basement parking are for 1,200 cars.

“We are planning to get golf-carts to ferry people inside the campus, said Mr Vishal Doshi, AGM, Marketing and Business Development. Kanakia has sold close to 40 per cent of office space at around Rs 10,000 a sq.ft. The company also offers space on lease at Rs 100 a sq.ft.

VERTICAL GARDEN

The vertical garden looks ‘pinned up' displaying 12,320 exotic plants with a drip irrigation system to water the plants twice a week. The commercial space comes with a bundle of add-ons such as a 616 sq.m club house, gymnasium and cafeteria, exclusively for the inmates.

DEMAND UP

“It is after a long gap that we see demand picking up in office spaces in various locations, thanks to the rapid infrastructure development happening in Mumbai, such as the Bandra-Worli sealink. We are experiencing good demand for small business spaces from the banking, financial services and insurance companies as well as shipping and logistic units, said Mr Mayur Shah, Managing Director, Marathon Group.

With the economy looking up and encouraging financial performance across sectors in the third quarter, the demand for office space is expected to increase in a big way. Upcoming development such as the Metro and Mono rail is expected to further boost commercial spaces demand.

Among various locations, Lower Parel is fast emerging as a hot destination for commercial spaces. BFSI companies are looking for great ambience, hospitality, facility of best restaurants, safety and security measures and unique designs, while buying spaces in Lower Parel, he felt.

Mr Abhishek Kiran Gupta, Head-Research, Jones Lang LaSalle Meghraj, said Mumbai saw the completion of about nine million sq.ft every year in 2008 and 2009, whereas the average annual absorption was six million sq.ft for the two years.

The overall vacancy level across Mumbai is about 14 per cent. Prices, both in the city and micro-markets, had corrected 35-50 per cent in 2008-09.

To keep real estate costs down tenants had moved from the central business district (CBD) to secondary business districts (SBDs) such as Andheri and suburbs such as Malad, Powai, Thane and Navi Mumbai.

Standard Chartered, UBS, Ernst & Young and JP Morgan are among those who chose to shift from Nariman Point (CBD), he said.

Financial centre

A Religare report said BKC had gradually transformed itself from a secondary district to the city's second business district (after Nariman Point) and is set to become India's international financial centre.

BKC's G block, housing leading banks and financial institutions, had secured the Maharashtra Government's nod to increase its floor space index (FSI) from two to four.

However, development in the block was likely to be spaced out due to the high realty prices stemming from the strong, continued demand and improving connectivity to the centrally located business hub.