Nariman Point: A New Lease of Life for Mumbai's Historic CBD
Nariman Point, once the heart of Mumbai’s business landscape, is experiencing a renaissance. With new companies, law firms, and international consulates setting up offices, lease rentals are on the rise, signaling a promising future for this iconic area.
Nariman PointReal EstateMumbaiCommercial LeasesCbdReal Estate MaharashtraOct 28, 2024
This revival has attracted high-profile tenants, including consulates like Poland and Germany. The Polish Consulate has secured a 3,000-square-foot lease in the Nirmal Building, while the German Consulate has taken a 7,442-square-foot space in Hoechst House. Even the Consulate of China has opened an office in the area, further underscoring Nariman Point’s growing appeal.
Consultancies like The Boston Consulting Group and investment banking giant Jefferies have also joined the neighborhood. The influx of these top-tier firms has spurred an 8-10% rise in rentals over the past year, driven by improved connectivity in the area. The upcoming 10.58-km Coastal Road and the Metro Line 3, linking Seepz to Colaba, along with the proposed development of a 4.2-acre plot opposite Mantralaya, are making Nariman Point a more accessible and attractive location for businesses.
Gautam Saraf, Managing Director of Mumbai & New Business at Cushman & Wakefield, highlights the impact of these developments “The access to Nariman Point through the Eastern Freeway, Coastal Road, and the soon-to-commence phase-II of Metro 3 has made Grade-A projects in Nariman Point appealing. The success of the auction of the MMRC land may also lead the state government and various nodal bodies to evaluate the monetization of other land parcels in South Mumbai in due course.”
Between January and September 2024, office leases for a remarkable 40,000 square feet of space were signed, and property consultants from Cushman & Wakefield predict this number could reach 60,000 square feet by the end of the year. In contrast, only 17,000 square feet of leases were closed in 2023, showing a significant rebound in demand.
Currently, Nariman Point’s rentals, at Rs 570 per square foot, have outpaced those in the central business hubs of Bengaluru and Delhi, where rates stand at Rs 353 and Rs 430 per square foot, respectively. While the Bandra-Kurla Complex (BKC) remains highly desirable with rentals hitting Rs 1,000 per square foot, Nariman Point’s strategic location and classic allure are hard to beat.
Keval Valambhia, COO of CREDAI-MCHI, stated that the resurgence of Nariman Point is a pivotal moment for Mumbai’s commercial real estate landscape. “Once the heartbeat of business activity in the city, Nariman Point’s renewed appeal reflects a strategic shift by both domestic and international enterprises toward centrally-located, prestigious business districts. Nariman Point’s accessibility, iconic waterfront views, and proximity to other key business hubs have undoubtedly strengthened its appeal, allowing it to compete once again with newer districts like BKC and Lower Parel.”
However, Valambhia emphasized the need to address Nariman Point’s infrastructural challenges to sustain this growth. “Legacy structures must meet modern compliance standards, and introducing flexible leasing models and incentives could attract a broader range of industries. Furthermore, with Mumbai’s commercial office vacancy rate hovering around 15% in recent years, Nariman Point’s revitalization could help optimize underutilized spaces, benefiting tenants and developers alike.”
As businesses flock back, Mumbai’s original CBD is reclaiming its position as a prime destination for corporate powerhouses, redefining its skyline for a new era.
Frequently Asked Questions
What is Nariman Point's current rental rate per square foot?
Nariman Point’s current rental rate is approximately Rs 570 per square foot.
Which consulates have recently opened offices in Nariman Point?
The Polish Consulate, German Consulate, and Chinese Consulate have recently opened offices in Nariman Point.
What are the key infrastructure projects boosting Nariman Point's appeal?
Key infrastructure projects include the 10.58-km Coastal Road, the Metro Line 3 linking Seepz to Colaba, and the proposed development of a 4.2-acre plot opposite Mantralaya.
How much office space has been leased in Nariman Point between January and September 2024?
Between January and September 2024, office leases for 40,000 square feet of space were signed in Nariman Point.
What challenges does Nariman Point face in sustaining its growth?
Nariman Point faces challenges such as modernizing legacy structures to meet compliance standards and introducing flexible leasing models and incentives to attract a broader range of industries.
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