Nariman Point may never regain its lost glory as the premier business location it once was. However, it will remain an important business district for certain industry-specific occupiers. For instance, established and individually-owned chartered accountancy firms will not move away from this location, since their proprietors own their offices and do not lease them.
Likewise, law firms actively specializing in extensive and high-profile litigation need to be close to the courts and will, for this reason, always prefer Nariman Point – which offers walking distance to the High Court as well as Mantralaya (the seat of Parliament) – to other locations such as BKC and Lower Parel. Interestingly, start-up firms looking for smaller offices will also continue to prefer Nariman Point to other locations, since they are unlikely to get affordable 500 sq. ft. offices anywhere else in the city.
Still A Superlative Location
Nariman Point has good rail connectivity with both Churchgate and VT Station in close proximity, and is in the same vicinity as South Mumbai’s elite luxury residential areas Napean Sea Road, Breach Candy and Cuffe Parade. In terms of social infrastructure too, Nariman Point scores extremely high with the Trident Hotel, a Inox multiplex, high-end restaurants and its unmatched sea view.
Nariman Point’s fortunes may change for the better in the future. The proposed Coastal Road will certainly lead to increased traction for this location when implemented, and the deployment of a metro line that ends at Cuffe Parade will mean greater accessibility from here to Churchgate station, effectively negating the once obligatory taxi commute. It should also be mentioned that the rapidly decreasing rentals there will inevitably lead to an increase in demand for offices at Nariman Point.
While the above factors do not exactly translate into a possible return to former glory, it does mean that Nariman Point will not sink into obscurity anytime soon.
Nariman Point is unlikely to re-attract larger MNC occupiers who have already moved out to other SBD locations. What can be expected is that companies which are currently based out of Nariman Point will expand within their current buildings, or into other buildings close by. Companies currently occupying leased office premises at Cuffe Parade and Churchgate may, in fact, aspire to move to Nariman Point since it is more up-market and the rental differential it offers will be at its lowest in the next few years.
Currently, office rentals at Nariman Point are equivalent to or 10% lower than rentals at Lower Parel, and 35% lower than rentals are BKC. The best buildings at Nariman Point command rentals of Rs. 275–300/sq. ft. on carpet area. In comparison, the rentals for the best buildings in Lower Parel and Worli range between Rs. 300–350/sq. ft. For some further perspective, some buildings in BKC fetch a rental of over Rs. 450/sq. ft. on carpet area.
On the residential real estate front, things could certainly be better at Nariman Point. Apart from the fact that there is zero fresh supply, ongoing property tax disputes between many Nariman Point societies and the local authorities are causing buyers to look askance at buying into some of the resale options in these projects.
If matters on this front clear up, the local authorities could use the property tax collected to refurbish the buildings and embellish them with modern facades and better amenities. Meanwhile, the dire need to widen roads at Nariman Point is not going away; unfortunately, only greater willingness by the authorities can help on this front. Also, pushing the Coastal Road proposition will definitely improve matters.
Authored by Ramesh Nair, COO – Business & International Director, JLL India
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