Is South Mumbai Real Estate Poised for a Revival with New Infrastructure?
Urban planners and real estate experts are optimistic that the new link between the Mumbai Coastal Road and the Bandra-Worli Sea Link will fuel the revival of South Mumbai's real estate, particularly in Nariman Point.
South MumbaiReal EstateNariman PointInfrastructureBwslReal Estate MumbaiOct 11, 2024
On September 12, Chief Minister Eknath Shinde and Deputy Chief Minister Devendra Fadnavis inaugurated the link connecting the bow-string arch bridge of the coastal road and the cable-stayed sea link. This new development has sparked optimism among urban planners and real estate experts, who see it as a catalyst for the redevelopment of Nariman Point into a hub for luxury housing, entertainment, and hospitality.
According to Knight Frank's latest report, 'South Mumbai - A Renaissance', there is a projected upsurge in office rentals in the area. Rents are expected to rise from the current ₹569 per sq ft to ₹1,091 per sq ft by 2030, reflecting a strong demand for premium office space. Knight Frank has also been mandated to assist the Mumbai Metro Rail Corporation in leasing a 4.2-acre plot in Nariman Point, with the bid recently floated.
Pankaj Kapoor, Managing Director of Liases Foras Real Estate Rating & Research, believes that the new link will bring South Mumbai closer to the western suburbs. He stated, 'When the link gets extended towards Versova and Kandivali, there will be parity in real estate prices. Nariman Point has smaller offices compared to the suburbs, but to attract corporates back, this needs to change.'
With the availability of higher Floor Space Index (FSI), there is potential to boost premium luxury housing in Nariman Point. This could transform the area into a hub similar to Walkeshwar and Peddar Road. As a linear city, offices and commercial spaces will remain in central parts, making it an easy commute for employees.
However, over the years, Nariman Point has lost its sheen with the development of central business districts in areas like Bandra Kurla Complex (BKC), Lower Parel, Prabhadevi, Worli, Powai, Andheri, Malad, and Goregaon. Vimal Nadar, Senior Director and Head of Research at Colliers India, noted, 'Full benefits from multiple infrastructure projects are yet to be witnessed. Given the development of road infrastructure, companies are preferring a hybrid and distributed work model. Currently, BFSI (banking, financial services, and insurance), law, and consulting firms prefer to have a presence in South Mumbai.'
For a complete overhaul, office buildings in some very old parts of South Mumbai require significant upgrades. For instance, Express Towers is being renovated by Bengaluru-based Embassy Office Parks. According to data from Colliers India, the average rental for the Nariman Point area ranges from ₹200-250 per square foot per month, compared to ₹150-600 per square foot per month in and around BKC, including Kalina. This disparity is due to the superior office infrastructure in BKC.
Real estate and urban planning expert Amol Shimpi stated, 'Improved accessibility to South Mumbai will have a long-lasting impact on its urban planning.' Shishir Baijal, Chairman and Managing Director of Knight Frank India, added, 'South Mumbai is witnessing a renaissance, driven by the transformation of strategic infrastructure across the city. As economic growth continues, we expect more companies to be drawn to the area, contributing to its revitalization and long-term commercial sustainability.'
Not everyone is as optimistic about the revival of South Mumbai's real estate, particularly in the SoBo (South Mumbai) area. While some corporate houses have already moved to Central Mumbai and beyond, government offices are also expanding northwards. For instance, a new GST complex is planned at Wadala, and central and state GST offices are in BKC. The new regional passport office has been relocated from Worli to BKC, and the new high court building in Bandra East will be ready in a couple of years.
A bureaucrat commented, 'While the new link will decongest South Mumbai and speed up movement to the suburbs, offices are unlikely to move back to South Mumbai from BKC. BKC has a different client base and better local infrastructure.' The official projected, 'The suburbs will see further growth when the sea link reaches Versova, amplifying development in areas like Juhu and Vile Parle.'
Over the years, geographical constraints have pushed development northwards, leading to the establishment of Navi Mumbai. Looking forward, the government has laid out plans to build a third Mumbai, NAINA, and expand towards the Dahanu-Palghar region. Given this scenario, Niranjan Hiranandani, National Real Estate Development Council Chairman and founder-chairman of Hiranandani Group, said, 'Why focus on the South Mumbai market in isolation? The entire MMR (Mumbai Metropolitan Region) is undergoing transformation and has immense potential. There is a surge in growth throughout, including the other side of Atal Setu. The land area in the north is much larger compared to South Mumbai, and the scope for construction in South Mumbai is only 5% compared to the rest of MMR. Infrastructure upgrades across MMR will further generate demand for areas beyond South Mumbai.'
Frequently Asked Questions
What recent development is expected to boost South Mumbai's real estate?
The recent connection between the Bandra-Worli Sea Link (BWSL) and the Mumbai Coastal Road is expected to boost South Mumbai's real estate by reducing travel time and making the area more accessible.
What is the projected change in office rentals in Nariman Point?
According to Knight Frank's report, office rentals in Nariman Point are projected to rise from the current ₹569 per sq ft to ₹1,091 per sq ft by 2030.
What infrastructure upgrades are needed in Nariman Point to attract corporates back?
To attract corporates back, Nariman Point needs larger office spaces and significant upgrades to existing buildings. The availability of higher FSI (Floor Space Index) can help in this regard.
Why are some experts skeptical about the revival of South Mumbai's real estate?
Some experts are skeptical because many corporate houses and government offices have already moved to other areas like BKC and beyond, which offer better infrastructure and a different client base.
What are the government's plans for expansion beyond South Mumbai?
The government plans to build a third Mumbai, known as NAINA, and expand towards the Dahanu-Palghar region, which is expected to further generate demand for areas beyond South Mumbai.
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