Ceejay House, which once commanded the highest rents in Mumbai, is today far more affordable. Rents have fallen off to between Rs 300 and Rs 350 per sq ft per month and while these may be at a premium to the rest of the market, they’re way lower than the average of R400 to R500 per sq ft per month seen six years ago.
Located in Worli in central Mumbai and with a gorgeous view of the Arabian Sea, Ceejay House once leased out space at R725 per sq ft per month, the highest ever rent paid in India. In 2008, London-based Barclays had leased out a 15,000-sq ft office here for which it forked out R1 crore a month.
While the increasing supply of Grade A space has led to rents falling, marquee offices in Mumbai are almost full.
While a Ceejay House or a Maker Chambers in Nariman Point has less than 10% of the space free, an Indiabulls Finance Centre in Lower Parel or a Maker Maxity in Bandra Kurla Complex, both newer buildings, are running at occupancies of 80-85%.
From the peak of R250-275 per sq ft per month in 2008, rents in Lower Parel have fallen to around R180-200 per sq ft per month. In 2010, Morgan Stanley leased 1.5 lakh sq ft space in One Indiabulls for around R190 per sq ft per month, suspected to be among the bigger transactions that year.
In BKC, where the properties are relatively new, having come up in the last one to two years, vacancies are slightly higher at close to 25%. Maker Maxity, which was among the first high-quality buildings to come up in BKC, is an exception, with the vacancy level at around 18.5%. Industry experts say the two other top-notch buildings, FIFC and TCG Financial Centre, have a vacancy level of 30-40%. For Maker Maxity, rents are at about R350-360 per sq ft per month while for FIFC and TCG, they’re between R310 and R330 per sq ft per month.
Even in Nariman Point, which has lost tenants to new business districts like BKC, high-end buildings continue to command fairly high rents — R240-270 per sq ft per month — and high occupancy levels. Maker Chambers III, for example has less than 10% of the space empty while in Maker VI, 85% of the space is occupied.
At the end of 2013, vacancy in Mumbai was 18.6%, Cushman & Wakefield Research says, while at a pan-India level it was around 20% in 2013, up from 19% in 2012.
Mumbai had 47 million sq ft of office space at the end of 2008, which has more than doubled to 102.7 million sq ft at the end of 2013, data sourced from Knight Frank India show. The quantum of office space grew on an average by 17% year-on-year between 2008 and 2013. However, the growth rate fell to 8% in 2013 as new office space completions fell by a sharp 37% to 7.6 million sq ft in 2013 from 12 million sq ft of office space completions in 2012.