A Maharaja’s treasure chest
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The monthly per square feet rates at BKC is Rs 250 and above followed by Prabhadevi at Rs 200 plus. Lower Parel is the cheapest among them at a per square feet rate of Rs 150 plus.
Analysts add that it is not just the price factor. The various buildings at Nariman Point also lack a lot of the modern amenities that companies are finding in the suburbs.
"The 50-odd buildings at Nariman point were all built between 1975 and 1978 and the safety and security features in these buildings are old and a lot of companies would not prefer these when better features and amenities with contemporary touch come at a lower cost in other areas," says Nair.
Among other issues, the car parking space provided to tenants is also limited, at one bay per 3,000 square feet of rental space, while the other emergent areas provide one for every 1,000 square feet. Further, there is another change gaining ground: managements are warming up to the idea of keeping offices nearer to places where employees reside. "Shifting to areas like BKC brings them closer to their employees, who stay in the western suburban areas," says Nair.
Due to lower interest in the area, rents have seen a correction climbing down significantly from the R450 to R500 per square feet being quoted earlier. In the first quarter of the current financial year, Nariman point has seen a marginal absorption of 10,000 sq ft compared to BKC, where 35,000 sq ft has been taken up.
Analysts also add that the slowdown in the economy has brought down the demand in the real estate sector and office space is one such segment.
"Slowdown in the economy is also one of the reasons for the fall in demand for office space and we have projected that the overall demand for office space will be 20 per cent low this calendar year compared to 2011," said Ravi Ahuja, executive director (office transactions), Cushman & Wakefield India.