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Office space: Andheri-Goregaon beats top Mumbai districts
The Andheri-Goregaon business district, in Mumbai's western suburbs, has beaten some of the city's established business hubs, such as Nariman Point, Bandra-Kurla Complex and Lower Parel-Worli, in absorption of office space.
Andheri-Goregaon, which forms part of secondary business district, has over the past three years seen absorption of 1.3 million to 1.4 million sq ft of office space annually - the highest among all business districts in Mumbai.
The only exception was the year 2012, when absorption in Lower Parel-Worli was 1.75 million sq ft, according to Cushman & Wakefield.
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Office space: Andheri-Goregaon beats top Mumbai districts
In the first quarter of 2013, the Andheri belt saw an absorption of 175,000 sq ft, while Bandra-Kurla's figure was 125,000 sq ft and Worli-Lower's 94,000 sq ft. Office space absorption at Nariman Point was 79,000 sq ft.
Firms are moving from Nariman Point and Worli areas to Andheri-Goregaon due to lower rentals, better efficiency in spaces and proximity to airport and residential hubs.
A number of firms like Deutsche Bank, Ernst & Young, Birla Sun Life and Tata AIG moved some of their offices from Lower Parel and Nariman Point to Goregaon.
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Office space: Andheri-Goregaon beats top Mumbai districts
"Andheri-Goregaon is more affordable than other areas," says Ashok Kumar, managing director of Cresa Partners, a commercial realty services firm. "Rent in Andheri is at least 30 per cent lower than Worli-Parel," Kumar adds.
While A-grade buildings at Nariman Point, the central business district, command rentals of Rs 275 per sq ft, those in Worli get around Rs 240, in Lower Parel around Rs 140-150 and Bandra-Kurla Rs 280 per sq ft.
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Office space: Andheri-Goregaon beats top Mumbai districts
In comparison, rentals in Andheri-Goregaon hover between Rs 90 and Rs 110 per sq ft.
At Nariman Point, rentals came down by eight per cent between 2010 and 2012, while those at Lower Parel and Worli reduced 13 per cent. Bandra-Kurla saw rentals rising eight per cent. The Andheri belt, however, registered a slide of 17 per cent in rentals during the period.
According to realty consultant Knight Frank, the secondary business district, which comprises Andheri and Goregaon, is expected to see a rental growth of 28 per cent and capital growth of 42 per cent between 2012 and 2017, giving investors returns of 15 per cent a year, next only to Central Mumbai's 19 per cent.
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Office space: Andheri-Goregaon beats top Mumbai districts
"First, offices were shifted from Nariman Point to Bandra-Kurla Worli. Now, they are being shifted to Andheri," Cresa's Kumar adds.
According to property consultants, office occupants also prefer Andheri-Goregaon for efficiency in space. "The built-up-to-carpet-area ratio in Andheri buildings is 80 per cent, versus 60 per cent in Lower Parel buildings," says a consultant. "If a firm moves from Lower Parel to suburbs like Goregaon, it can save at least Rs 50-60 per sq ft every month. That translates into significant savings for it over a nine-year period," says Raja Seetharaman, managing director, Aperon Realty, a property consultant.
"Also, travel is a big issue in Mumbai. So, having offices at Andheri-Goregaon will reduce travel time for employees living in these areas," he adds.
