There will be a relocation of offices from the central business district if Mumbai to alternative business districts leading up to 2020. Therefore, in secondary business districts, there would be an appreciation in rents owing to falling vacancy levels, and in suburban markets owing to a low base effect, said a report from real estate consultancy JLL India authored by its Mumbai managing director Karan Singh Sodi.
The central business district will see a continued decline in rent (except for Grade-A properties) because of a scarcity of both large floor plates and modern amenities, the report stated. Some of these changes are already visible. The central business district’s vacancy levels have shot up to 95 in 2016 from 2 per cent in 2007.
The central business district has an available office stock of 6 million square feet compared to 102 million square feet for the secondary business districts in BKC, North zone, Central zone, Western suburbs, Thane and Navi Mumbai, the report said.
Corporations are also moving to secondary business districts to give their staff more attractive working environments.
The newer districts have better quality buildings, while the government plans to support the development of peripheral areas of Mumbai, with the objective of improving efficiency of labour by locating businesses closer to suburban residential clusters.
This could help ease the peak hour traffic congestion and over-crowded transit infrastructure, the report has said. Information technology companies are also gravitating towards suburban locations because of lack of available space in built-up areas in the central districts, the report added.
However, it warned that there are some issues that are yet to be resolved, citing the example of a large and growing scarcity of car parks in the central and north secondary business districts. According to Colliers Research, Navi Mumbai has emerged as a prime technology micromarket in Mumbai.
Several banks have started moving their back office operations to Navi Mumbai as they want to optimise costs and avail of quality office spaces in Grade-A establishments.