The central area, that includes Worli, Lower Parel, Parel, and nearby locations are witnessing a vacancy of as high as 15-17%, with an available commercial space of about 5-6 million sq feet at the moment. Rentals in the central area are now as low as Rs 150-170 per sq feet from Rs 290-320 per sq feet in 2008, when demand was at its peak. Considering there is a huge supply in the central part, we feel pricing will remain stagnant for some time now and probably a correction will take place next year, Abhishek Kiran Gupta, head of research and REIS, Jones Lang LaSalle India said.
Developers like Peninsula Land are building commercial properties like Peninsula Business Park and Center Point in Lower Parel and Parel, respectively. IndiaBulls already has One Indiabulls Center and is coming up with the Indiabulls Finance Center. Omkar Developers is coming up The Summit - Business Bay at Worli, in addition to other developers who are building commercial properties in this area.
Prakrut Mehta, national director-office & industrial agency, Knight Frank India, said, A lot more corporates and private equity players are now preferring BKC over the Central part. The BKC had seen a marginal price increase last year. However, it has been constant since then. The reasons largely are the large and spacious offices and convenience for employees in traveling to BKC. J P Morgan, Macquarie, RBS, ABN AMRO and Societie Generale are some of the firms that have either moved out or are expected to be exploring options outside of South Mumbai.
The BKC currently has a commercial space of about 6.5 m sq.ft. and is witnessing a vacancy of about 4-5% at the moment. Rates in BKC are about Rs 200 per square feet. Rates during the peak were at about Rs 250-330.