Mumbai is losing its commercial capital tag
Reports say the city's commercial real estate market is slowly shifting to Hyderabad and Chennai
Mumbai’s commercial real estate market is slowly shifting from South Mumbai and Bandra Kurla Complex to the suburbs.
This is related to the country’s overall commercial real estate market situation. While southern cities such as Hyderabad and Chennai have shown an increase in commercial office sales, prime commercial cities such as Mumbai, NCR and Bangalore have seen a dip. Reports suggest that the rentals have either dropped, or have not increased at all.
According to reports from Commercial Real Estate Services (CBRE), an international real estate consultancy firm, the three leading hubs — NCR, Mumbai and Bangalore — which accounted for 75 per cent of the entire space getting transacted in the country in the previous quarter, had their market share reduced to about 62 per cent in Q3 2012.
Anshuman Magazine, chairman and managing director, CBRE, said, “While the first half of 2012 witnessed an increase in office space absorption, the figures from Q3, 2012 confirm the decline in demand for office space due to the lull in the local as well as global economy. This is expected to continue in the coming months.”
According to reports, a slowdown in the decision-making and expansion plans of corporates contributes to the decline in transaction activity at BKC. Small markets witnessed an overall sale of about 75,000 sq ft, which is lower than the sale levels witnessed in earlier quarters. Instead of major transactions, buyers have invested in small office spaces.
“The global slowdown has affected the sales of commercial office space in Mumbai,” said Arvind Goel, President MCHI-Navi Mumbai.
Another builder said lack of infrastructure is a major drawback. “For the present condition to improve, the overall infrastructure of the city will have to be improved,” said the builder.