Kurla alone will add office space that is three times that of Nariman Point
Kurla is dotted with narrow, dingy bylanes and isn’t exactly considered a tony address in the commercial capital of the country. But that could change soon.
Kurla is set to add over 6 million square feet (sq ft) of swanky office space and around 3 million sq ft of mall space shortly. Leading the charge are developers such as Phoenix Mills, Kohinoor, HDIL and others.
This upcoming office space is three times the 2 million sq ft office space at Nariman Point, the city's main office hub, and half of Bandra Kurla Complex (BKC), the secondary business district.
There’s more. R City, the biggest mall in the city covering 1.25 million sq ft, is up and running in the eastern suburbs of Ghatkopar, which houses global brands such as Marks & Spencer and Apple i-store, among others. And the Vikhroli-Kanjur Marg belt, which is in close proximity to Hiranandani's Powai township, has added nearly 5 million sq ft of office space, with new developments by Lodha, HCC, Akruti and others vying with each other for new clients.
Last year saw one of the biggest property deals in Mumbai when the National Stock Exchange bought 80,000 sq ft of office space from Unmesh Joshi-led Kohinoor City in Kurla, for Rs 120 crore. NSE is expected to use the Kurla property for its operations, as its main office in BKC is not adequate for its operational requirements.
The hitherto low-profile eastern suburb of Mumbai, starting from Kurla to Thane on the Lal Bahadur Shastri Marg, is fast becoming the next commercial hub of the city with tony office complexes and new-age retail destinations, giving tough competition to its southern and western counterparts such as Nariman Point, Worli-Lower Parel and Bandra Kurla Complex, among others.
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The reason: Easy accessibility from most parts of the city, a good road network, lower property prices than the western and southern suburbs and availability of large tracts of land from now-defunct mills.
"After 2003, the only region that saw rapid growth is the eastern suburbs because of land availability and cheaper property prices. In 2003, the average property price in the eastern suburbs was less than Rs 2,000 a sq ft, while the western suburbs fetched Rs 3,000 a sq ft,'' Pankaj Kapoor, chief executive of Liases Foras, a realty research firm, said.
Lower property prices have played a major part in the growth of the eastern suburbs. The new office complexes in Kurla charge rents of Rs 100-150 per sq ft compared to Rs 300-325 at BKC, which is just a 15-minute drive from Kurla.
Outright sale prices at BKC are Rs 35,000 a sq ft, against Rs 10,000-15,000 in Kurla.
Though home prices in this belt have nearly doubled in the last four years, they are still 30 per cent lower than those in their western counterparts, property consultants said.
"Since many suburbs such as Powai, Bhandup, Mulund, Thane and others have come up very fast, it makes sense for companies to set up offices there. This belt is also becoming a destination for firms that want to move from BKC and Nariman Point for lower rentals,'' said Pawan Swamy, managing director - West India, Jones Lang LaSalle Meghraj (JLLM), an international property consultant.
Developers agree. Atul Ruia, managing director of Phoenix Mills said, “Where else in Mumbai would you get land to develop large-scale projects? I think this belt will become a hotbed for development projects.” Ruia should know, as his company is investing around Rs 600 crore in its 25-acre Phoenix Market City project on LBS Marg in Kurla, which will see 1.7 million sq feet of office space, a 2 million sq feet mall and a 220-room hotel.
Added Amol Shimpi, vice president, business development, Hindustan Construction Company (HCC) Real Estate: “This area is equidistant to both the western suburbs and Navi Mumbai and the cost of commuting is lower.
Because of lower transportation costs and rentals, the cost of operations is certainly lower for firms here than in other suburbs,’’ Shimpi said. HCC has developed 1.8 million sq ft of office space at 247 Park in Vikhroli and leased around 55 per cent of it.
And companies have done exactly that. E-commerce company eBay shifted to Akruti Corporate Park in Kanjur Marg from its office premise in central Mumbai because it wanted a larger area and a workplace closer to the railway station.
Property buyers are equally bullish about prospects. “Consumption is growing fast and it’s an interesting area to watch out for,’’ said Rajan Malhotra, president, retail strategy, of the Future Group. The company has booked around 100,000 sq ft in HCC’s 247 Park.
INFRASTRUCTURE BOOST
Though the suburb is connected by LBS Marg, the Eastern Express Highway along the way has improved connectivity significantly, experts said. The Rapid Bus Transit System, with its dedicated bus lines on the express highway, will ease the traffic on it.
Phase I of the Mumbai Metro project from Ghatkopar to Versova, scheduled to be completed by 2011, is expected to give a fillip to the connectivity of the eastern and western suburbs. The subsequent phases, which will be completed in 2016, are expected to boost the accessibility of these suburbs. Phase II of the Mumbai Metro involves a 12.4 km stretch between Ghatkopar and Mulund and Phase III involves a 19.5 km stretch between BKC and the Kanjur Marg via Airport.
The plans of six-laning the Central Railway tracks from Chhatrapathi Shivaji Terminus to Thane is also expected to ease the train commute on the eastern suburbs.
Though developers are bullish about commercial rates shooting up soon, with demand for commercial properties coming back, real estate analysts are wary of the eastern suburbs going the way of the western and central suburbs.
“We expect rents to go up almost four times to Rs 400 a sq ft in the next three years. The rents would have gone beyond Rs 200 by now in places like Kurla but for the economic slowdown,’’ said Atul Modak, project Head, Kohinoor City, in Kurla, which will have 900,000 sq ft of commercial space.
“Commercial real estate is still a major concern because there is a huge commercial supply and demand has not picked up significantly as the economy is still not doing well enough,’’ said Pankaj Kapoor, chief executive of Liases Foras, a realty research firm.