BUDGET ISSUES: Due to the economic slowdown, MNCs are opting out of fancy buildings like these in upmarket locations like BKC and Nariman Point

In a bid to cut costs in the time of economic slowdown, MNCs, IT/ITES, financial sector services and insurance companies have halved their rental lease budget and are opting for less fancy buildings in non-prime locations.

According to Sangeet Kumar, CEO, New Equations Consulting, "Earlier, MNCs told us to source only grade 'A' buildings with glass exteriors, a must. Today, most of the corporates are downsizing their requirements and becoming less choosy while selecting office space.

Obviously with the cash crunch and the slowdown in business, corporates are keeping a tab on their expenses. Forget main road, a lane is fine now," said Kumar.

Companies are also shifting their branch offices to cheaper locations. Broker Vikas Bhatia of Shree Anand Niketan Private Limited said, "Many corporates are relocating their offices from Nariman Point to cheaper locations in Navi Mumbai. I am in the process of inking several deals, as companies who used to pay Rs 200-250 per sq ft are now eyeing office space between Rs 60-80 per sq ft in Navi Mumbai."

According to Sandeep Sadh, CEO, Mumbai Property Exchange, a real estate firm, if one leases 5,000 sq ft, he spends a minimum of Rs 15 lakh on rent per month. "That's why companies are trying to save money," said Sadh.