Investment Potential Of Rs 2,600 Cr In Office Space Up-gradation In Mumbai
New Delhi: There is investment potential of Rs 2,600 crore in office space up-gradation in Mumbai with a payback of about three years.
High vacancy levels and dwindling rentals in the CBD area, fast-evolving preferences of corporate occupiers and limited scope for further construction of good quality office spaces even in the SBDs gibve a glimpse of how important it is for building owners and landlords to upgrade their buildings. In Mumbai, the total Grade A office stock that was constructed 10 years ago stands at 44 million square feet and all of can be upgraded. In terms of number of buildings, this is half of the total stock in the Maximum City, according to a report by JLL.
“Out of the total upgradation potential of over 40 million square feet, BKC, CBD and West Suburbs markets will remain the key drivers. The human centric design elements of an upgraded office space with better aspects like operational efficiency, operating costs, technology, community, sustainability and Wellness, safety and compliance, make them more appealing for not just the young workforce but instantly heightens the opportunity for investors to retain their clients, increase rentals and enhance their asset value,” said Aditya Desai, Executive Director and Head of Developer, Investor Services for India at Projects and Development Services (PDS), JLL.
The quantum of Grade A office stock in the CBD of Mumbai has remained stagnant. In the SBDs, suburbs and peripheral commercial markets grew fast. With submarkets like BKC, BKC Fringe and SBD North now saturating in terms of land availability, the new stock of Grade A offices in the coming five years is largely concentrated in the peripheral submarkets. Navi Mumbai accounts for 37 percent of the upcoming supply in the city over the next five years, mostly for IT/ITeS occupiers.