With real estate costs that are nearly as competitive as those in Gurgaon, Pune or even some pockets of Bengaluru, Navi Mumbai is staking a claim to become the next big IT hub. At R50-55 per sq ft per month one can now rent Grade A office space in Vashi or on the Thane-Belapur Road. That compares favourably with the asking rate in some pockets of Pune which is now R70 per sq ft per month and in Gurgaon where it’s even higher. Rents in Navi Mumbai are also lower than the R60-70 per sq ft per month that most micro markets in Bengaluru cost, save Whitefield and Electronic City where, of course, they are far lower at around R42 per sq ft per month.
More important, given 8.5 million sq ft is set to hit the Navi Mumbai market in the next two years, IT firms scouting for space here stand a good chance of finding it; other markets may not be able to match this level of supply, experts say, adding the international airport coming up in the vicinity is also a big plus.
It’s not just lower rents in Navi Mumbai which are lower than Chennai’s IT corridor in the suburban south, where they are over R62 per sq ft per month, which are likely to pull in companies. Connectivity with the rest of MMR is getting better thanks to links via road, rail and mass-rapid transport. There’s also the 23.40 kilometre long metro line connecting Belapur to the Navi Mumbai International Airport.
Moreover, Mumbai suburban railways operates direct services between the western suburb of Andheri and Panvel in Navi Mumbai.
Navi Mumbai is now also connected via the eastern freeway in Chembur to Nariman Point in south Mumbai. The distance between Panvel and Nariman Point — which is close to 50 km can be covered in a little over an hour by road — earlier this would have taken more than two hours. Should the Mumbai Trans Harbour Link become a reality it would reduce the travel time further to about 30 minutes.
That apart, the common area maintenance cost (CAM), which is billed to the tenant, too is more affordable here. At R5 to R7 per sq ft per month they compare well with R6 to R9 per sq ft per month in Bengaluru. In Delhi-NCR on the other hand, CAM charges are more than R10 per sq ft per month, according to C&W.
Indeed, the Maharashtra government is keen to see some IT campuses spring up here and is working overtime to ensure that the opportunity lost years ago, due to high land prices, escalating rents and inadequate infrastructure, is not lost again.
To be sure, IT and ITES already have some presence here; among the marquee names that have operations include Capgemini, Reliance Industries, Syntel, Wipro, TCS, L&T Infotech, WNS and Accenture. The coming years could see many more tenants. Gautam Saraf, managing director (Mumbai), Cushman and Wakefield, points out the area not only enjoys competitive rents, the supply pipeline too is large. “Grade A office space is available at less than $1 per square feet per month and that’s comparable to other IT corridors,” Saraf says.
Indeed, the Navi Mumbai region now uses up roughly a third of the commercial space created in Mumbai every year of about five million square feet; so close to 1.6 million square feet is rented out in Navi Mumbai and about 3-3.5 million sq ft in the rest of Mumbai. At this pace, the area across Vashi, Thane-Belapur Road and Panvel, which is spread across 344 square kilometres, now accounts for a fifth of the total Grade A office space in Mumbai of 70 million sq ft. And of this, IT Parks and IT-SEZs cover more than 90%.
For their part, builders are looking forward to welcome more IT players in this part of the Mumbai Metropolitan Region (MMR). Vinod Rohira, managing director (commercial real estate and REIT), K Raheja Corp, points out land costs around Rs 6-8 crore an acre in Navi Mumbai while in Hyderabad prices have shot up to Rs 22-25 crore an acre. “In Bengaluru, all land is under joint development and therefore not available for sale,” Rohira says who believes the potential is still untapped.
K Raheja Corp has a near monopoly in Navi Mumbai’s IT Park/SEZ market. Rohira says with large parcels of land available and improved connectivity, Navi Mumbai is emerging a key sub-market of Mumbai for IT SEZs, IT Parks and IT campuses.
K Raheja holds 150 acres of land between Airoli and Juinagar in Navi Mumbai. The company has 3 IT Parks across these two locations and has built 7 million square feet of space. Around 3 million square feet is under construction, and another 2-3 million square feet is in the pipeline.
Apart from K Raheja, Reliable Space and Larsen and Toubro are among the prominent developers that have completed and under construction commercial buildings in the area.