Ceejay House in Mumbai affordable now
Ceejay House in Mumbai, which once demanded the highest rents, is far more affordable today. Rents per month have plunged to between R300 and R350 per sq ft and while to the rest of the market these may be at a premium, they’re way lower than the average seen six years ago of R400 to R500 per sq ft per month.
Ceejay House, located in Worli in central Mumbai and with a gorgeous view of the Arabian Sea, with the highest ever rent paid in India once leased out space at R725 per sq ft per month. In 2008, 15,000-sq ft office had been leased out here by London-based Barclays for which it worked out Rs 1 crore a month.
While in Mumbai marquee offices are almost full, the increasing supply of Grade A space has led to rents falling.
While the newer buildings, an Indiabulls Finance Centre in Lower Parel or a Maker Maxity in Bandra Kurla Complex, are running at occupancies of 80-85%, a Ceejay House or a Maker Chambers in Nariman Point has less than 10% of the space free.
Rents in Lower Parel have fallen to around R180-200 per sq ft per month from the peak of R250-275 per sq ft per month in 2008. Suspected to be among the bigger transactions in 2010, Morgan Stanley leased 1.5 lakh sq ft spaces in One Indiabulls for around R190 per sq ft per month.
In BKC, having come up in the last one to two years where the properties are relatively new, vacancies are slightly higher at close to 25%. With the vacancy level at around 18.5%, Maker Maxity in BKC is an exception, which was among the first high-quality buildings to come up. Industry experts say FIFC and TCG Financial Centre, the two other top-notch buildings, have a vacancy level of 30-40%. Rents are at about R350-360 per sq ft per month for Maker Maxity, while for FIFC and TCG; they’re between R310 and R330 per sq ft per month.
Even the high-end buildings in Nariman Point, which has lost tenants to new business districts like BKC, continue to command quite high rents — R240-270 per sq ft per month — and high occupancy levels. In Maker VI, for example, 85% of the space is occupied while in Maker Chambers III less than 10% of the space is empty.
Cushman & Wakefield Research says, vacancy in Mumbai was 18.6% at the end of 2013 while at a pan-India level it was around 20% in 2013, up from 19% in 2012.
Knight Frank India data shows that at the end of 2008 Mumbai had 47 million sq ft of office space, which has more than doubled to 102.7 million sq ft at the end of 2013. Between 2008 and 2013, the quantum of office space grew on an average by 17% year-on-year. However, in 2013 the growth rate fell to 8% as in 2013 new office space completions fell by a sharp 37% to 7.6 million sq ft from 12 million sq ft of office space completions in 2012.
Source: Financial Express
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