Nariman Point in among the worst performing office rental markets

Posted a 4% yearly decline in office rents in the first quarter of 2015

Mumbai’s Nariman Point is one of the worst performing central business districts (CBDs) in the world in terms of growth in office rents, said a new study. Nariman Point posted a four per cent yearly decline in office rents in the first quarter of 2015, only behind Sao Paulo and Moscow, which saw a five per cent and 24 per cent dip in office rents respectively, said the survey by global property consultant Jones Lang LaSalle.

Brussels and Paris were the other two cities, which saw four per cent and three per cent depreciation, respectively. Frankfurt was the only city that saw no change.

London was the top performer at 12 per cent increase in rents followed by Tokyo at seven per cent. Shanghai, Hong Kong and New York grew at four per cent, Dubai at three per cent and Sydney at one per cent. One of the major reasons behind the fall in rentals is the shift in demand from Mumbai’s CBD to the secondary business districts (SBDs) in its suburbs, JLL said.

“The city’s CBD is losing its sheen over the past five to six years and rentals here fell by 3.4 per cent in the last one year,” it said. “As demand for residential properties moves towards suburbs farther away from the city centre, so does the demand for office spaces. As part of that trend, Bandra Kurla Complex (BKC) is now the de-facto CBD of Mumbai,” JLL said.

Sufficient and quality supply in SBD, improved connectivity and competitive rates in SBDs are also some of the reasons for the shift, it added.