By Wasana Nadeeshani Sellahewa
(Commonwealth)_ South Mumbai once hailed as a bustling real estate hub in India, is poised for a potential revival with enhanced connectivity through the introduction of a new road and metro service. Over the years, the area experienced a decline in prominence as businesses gradually migrated to other parts of Mumbai. However, with ambitious projects like the Mumbai Coastal Road and the Mumbai Metro-3 underway, optimism for a resurgence is palpable. Despite these promising developments, experts caution that a complete revival may still be a distant prospect.
The Mumbai Coastal Road, spanning 10.58 kilometers between Marine Drive and the Bandra-Worli Sea Link, along with the impending launch of the Metro-3 line connecting Seepz and Colaba, are expected to catalyze South Mumbai’s transformation. These infrastructure endeavors aim to bolster connectivity and reduce travel time, thereby rendering South Mumbai more accessible to businesses and residents alike. The partial opening of the Coastal Road and the imminent commencement of Metro-3 operations are anticipated to play pivotal roles in shaping the area’s future landscape.
While these initiatives hold promise for bolstering demand in South Mumbai’s commercial real estate market, experts caution that it may not rival the stature of Bandra Kurla Complex (BKC), India’s premier commercial district, in the short term. Uday Kotak, founder and director of Kotak Mahindra Bank, highlighted the stark contrast in commercial office space rates between Mumbai’s BKC and global financial centers like New York. Notably, office space rates in BKC surpass those in New York, underscoring the district’s allure as a prime commercial destination.
In South Mumbai, a key obstacle hindering its resurgence is the restricted floor space index (FSI) for redevelopment. FSI governs the maximum construction allowed on a plot, directly impacting urban density and redevelopment potential. This limitation poses a significant challenge to revitalization efforts, as it constrains the scope for modernization and expansion within the area. Addressing this constraint is crucial for unlocking South Mumbai’s full potential and revitalizing its commercial landscape, requiring innovative solutions and collaborative initiatives to navigate regulatory hurdles and foster sustainable urban development.
In terms of office leasing, South Mumbai accounts for a modest share of Mumbai’s commercial real estate market, ranging between 5 to 10 percent. Rental rates in the area have experienced a decline, primarily due to the dearth of quality office spaces. Conversely, BKC has witnessed a surge in rental rates over the past five years, bolstered by its convenient location and upscale infrastructure.
Office rentals in BKC, which ranged from Rs 125 to 350 per square foot in 2020, have escalated to Rs 250 to 500 per square foot in Grade-A properties. This upward trajectory in rental rates underscores BKC’s status as a preferred commercial hub, driven by its accessibility and premium offerings.
Despite the absence of new Grade-A office spaces in both BKC and South Mumbai’s Nariman Point, once the central business district (CBD), in the past two years, rental rates in BKC remain elevated due to the abundance of quality options in the vicinity. Experts attribute the higher rentals in BKC to the convenience and superior amenities available, further cementing its appeal among businesses and investors.
South Mumbai’s potential revival as a commercial hub hinge on the success of infrastructure projects like the Mumbai Coastal Road and Metro-3 in enhancing connectivity and accessibility. While challenges such as limited FSI for redevelopment persist, concerted efforts to address these issues could pave the way for South Mumbai’s resurgence in the long run. However, for the immediate future, BKC is likely to maintain its status as India’s premier commercial district, buoyed by its strategic advantages and upscale offerings.
