Mumbai, Saturday, August 25

Rentals@ Rs 450 a square foot, Mumbai sets record

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Mumbai: Mumbai's property market has set a new record. A commercial property was rented out at a whopping Rs 450 per sq foot in the financial hub of Bandra Kurla complex.

Forget residential buildings, which are already above a crore for a standard 2-bedroom flat, the office spaces in Mumbai are now costing something next to one in Manhattan.

Corporates are literally struggling to find a reasonable deal. Over the past 9-months, rentals have shot by 40 per cent in the posh Bandra Kurla complex area in Mumbai.

Limitless Group, a sister company of Dubai based developer Nakheel has recently signed a $ 10 billion joint venture with real estate major DLF, to develop townships in Mumbai.

The Dubai based group has already snapped up 12,000 sq feet in the famous IL&FS building in Mumbai, which is now renting out space in the building at Rs 450 per square foot.

The Limitless Group will pay Rs 54 lakh a month for its own office space.

Rents in Bandra Kurla Complex have now crossed the rentals at Nariman Point and Lower Parel areas where they are at Rs 290 - 350 per sq foot.

Sources say this recent deal at IL&FS already has led the builders quoting sky high prices for mediocre properties. Anuj Puri, Chairman & Country Head, JLLM said, "It's purely because demand is outstripping supply. 12 months ago the prices were at Rs 250 a sq foot, which though seemed high at that point have gone much higher now."

Recently, the British High Commission pre-leased a space in the under-construction Naman Chambers for Rs 350 per sq foot.

The Fortune 2,000 building and Windsor Plaza are now quoting Rs 330 a sq foot compared to Rs 250 sixmonths back.

The Bandra Kurla complex has only 3 lakh sq feet of commercial space to offer at the moment. And that is a far cry from the current requirement.

Industry watchers say approximately 2 million sq feet of office space will enter this market in the next 2 years, and that's when corporates could find some respite from the soaring rentals.