Commercial Property Market in Mumbai to Restructure and Realign
“The Mumbai Commercial property market will go through a complete Restructuring and in future, every Micro market will have an element of CBD’s. The process may be slow, but it will happen” – Says Sandeep Sadh
The Indian Economy opened up and gave way to the incoming of the MNC’s after the Year 1988. Prior to that, the Commercial office space requirement was limited to Industrialists, Indian Companies, General Trading Cos, Banks, Government Buildings, High Street Retail, Consulates, Hospitals, Cinemas etc.
There was a time, when there were only 2 well known CBD’s – First being, Fort, Ballard Estate & Nariman Point for regular office works and the Second one being Worli which was dominated by the Pharmaceutical Cos. Lower Parel, Mahalaxmi had for Factories, Bandra Kurla had Government offices and Andheri East was also dominated by Textile and Chemical industries.
Then came in the IT Revolution, BPO, IT Parks, Software Technology Parks, IT offices with requirements of large floor plates of nearly 40000 to 60000 sq.ft office spaces etc. and Companies would take up either a Building or a Floor. A good example of this is Mind Space – Malad, Hiranandani – Powai, Mind Space – Airoli, Nirlon Complex – Goregaon East and the Chandivali, Saki Naka and Andheri East belt.
Along with IT, also came the MNC’s and the Banking Sector Real Estate Revolution, which is the New BKC and the New Lower Parel district today, dotted with Top Buildings and having TOP Fortune 500 Companies of the world. The Capital of Wadhwa Group is a classic example of the International Class building development.
Also during the same time frame, came in the Malls with structured Retail outlets right on the heels of the IT boom with these Gd + 3 Structures loaded with Western Brands and Food Courts, Ample parking, and the consumers have lured into them automatically.
A few years back rents were reported to be above Rs.500/- PSF in a few of the Top Buildings and now if you review in 2013, the rents from Nariman Point to Kalina are nearly the same. The rents vary from Rs.130/- to Rs.300/- per sq.ft. You can have the same budget in any of the locations between these and you will find something or the other sooner or later.
All the above CBD expansions, developments led to a Residential boom in areas, which had enough human traction and traffic. Over the years with each Micro Market developing in Mumbai rapidly, each location has become near overcrowded in Western Suburbs or Eastern Suburbs, as a result, the commute time to Work has become erratic, irritating and of course costly in time and money. The suburban traffic from Borivali to Bandra in the morning is a nightmare and to counter this, going forward with Information and Technology in your hand, you will see a New Revolution.
The New SOHO Revolution or the 15 to 45 Min Drive to work culture especially in the same or surrounding locations and Not crossing East – West or going into areas which are prone to traffic snarls and jams will be the new order of the Day as people are not wanting to commute and spend their precious time in just commuting.
More and more people are opting for either smaller office spaces across cities and work in different groups or divisions so that there is no need of having a large office at Nariman Point when all the staff comes from Thane or Malad or Virar and divide themselves into sectors.
The IT revolution with SKYPE, Facetime, What’s App, BBM, Video Conferencing etc. the world is becoming a smaller place. “My Mom does not miss me anymore as she sees me every day or few days on SKYPE and sends nice Good Morning messages on the what’s app”, which was not possible a few years back.
Going forward, the developers will start making multi-use, Commercial and Residential buildings with state of the art amenities so that a Businessman can be around his residential block and work.
Thane is another classic example, where in a decent portion of commercial buildings in Wagle Industrial Estate are now picked up by Large MNC’s as Back office operations. Navi Mumbai, the offices around the stations are made to suit the commuters and not give them 3 different connectivity’s to reach their offices. So the concept earlier has been there, to make offices around connectivity, but in an expensive city like Mumbai, the commute from your Home becomes far and far every time.
At New Cuffe Parade, Wadala, Lodha developers are coming out with a Commercial Building abutting a High-End Residential Complex. Oberoi Realty Ltd is coming up with 12 Residential Towers and 1 New Commercial Tower in Goregaon East and a Fully Functional Commerz with Westin is already ready and fully occupied.
Going forward the Commercial market will go through a Paradigm shift, which means, some pain (read changes) will still be on for the commercial market, as Reconciliation and Realignment will remain the order for the next few years.
The reason of Andheri East booming in early 2000 was simple that people were fed up of traveling and Andheri East became a suburban CBD and BKC’s flashy buildings gave a New and Rich Look to the Corporates and Banks.
The reason CBD Belapur was a failure in the year 1995 through 2008, because there was no Human Traction there, very less habitants in the area, and people were thinking it as an alternate to Mumbai. Real estate commercial boom and occupation require human traction, which places like Malad, Andheri East easily give due to Malls, IT Complexes, Corporates etc bring in.
Mumbai is a fast learning city because it experiences everything quick and a lot of concepts of the West are tried very quickly, be it failures. A simple one being the cycling track within BKC, which in all fairness is nice, but not a single office goer uses it. It is been a small mistake but its ok, not end of the world, we won’t head towards Detroit with this one.
When the residential boom started, developers changed their Commercial to Residential and when the need arises for having a smaller commercial portion in the Building, people will do so as well. The urge to the Government should do give concessions in making mixed use developments with a few floor office spaces with independent access and no alignment with the residences in buzzing locations and relooking at aligning the traffic prone areas by limiting FSI and granting more FSI to areas where the infrastructure supports the people’s welfare.