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‘Bandra Kurla Complex has 4th highest rentals in Asia Pacific’

Bandra Kurla Complex,the preferred location of several corporate houses looking to consolidate their businesses in larger office space,now commands the fourth highest rentals in the Asia Pacific region.

Written by Express News Service | Mumbai |
August 3, 2011 3:07:49 am

Bandra Kurla Complex (BKC),the preferred location of several corporate houses looking to consolidate their businesses in larger office space,now commands the fourth highest rentals in the Asia Pacific region.

According to a recent Asia Pacific office leasing market report by the international property consultants Jones Lang LaSalle,the alternate business district of BKC with its high annual rentals of $743 per sq m has the fourth most expensive commercial real estate rentals. The average rentals for this micromarket come to approximately Rs 290 per sq ft per month. The only cities more expensive as far as office rentals are concerned are Hong Kong,Tokyo and Singapore in that order.

While traditionally the South Mumbai markets of Nariman Point and Worli have commanded the highest rentals in Mumbai,according to Ashutosh Limaye,head of Research and Real Estate Intelligence Services at JLL,the BKC rentals started their upward spiral post the long recession induced lull in commercial real estate. “In Nariman Point,most of the buildings are owner occupied and the office spaces on offer are small and fragmented. BKC on the other hand has lots of new supply and larger offices available,” said Limaye adding that BKC is one of the most active markets in Mumbai at present.

The business district has also seen quite a few recent transactions. The last quarter of this year (April-June 2011) saw Texas Pacific Group leasing out 12,000 sq ft of space in Wadhwa group’s Platina at BKC. Both Citibank and Deutsche Bank are soon expected to pick up massive space in BKC as part of their expansion plans. Planned as an international finance and business centre,BKC already has a strong presence from the banking sector with National Stock Exchange and financial institutions having their offices in BKC. One after the other,several consulates too have also shifted base to BKC or are in the process of doing so. This includes the British Deputy High Commission,American consulate and French consulate.

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“BKC has seen the maximum rental increase on a quarter to quarter basis. In the last quarter rentals have gone up by 3 per cent,” said Limaye. He added that there would be a 5 per cent rise in rentals in BKC every quarter. “Mumbai as a whole,except for Lower Parel which has an oversupply,will see an increase as commercial rents. It will be the highest in BKC as it is the most preferred due to larger floor plates,good parking and infrastructure.”

Mumbai’s BKC is followed by Shanghai and Beijing,where rentals are comparatively lower. Commenting on the overall Asia Pacific commercial market,Stuart Crow,head of Asia Pacific Capital Markets for JLL said,“Despite continued uncertainty in the global economy,the Asia Pacific real estate markets have remained resilient in the past six months. Pricing growth and transaction volumes are starting to stabilize which is not necessarily a bad thing,after the huge volatility in the past three to four years.”

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