Mumbai's Andheri East, an attractive destination from investment viewpoint

Since Mumbai is the commercial and financial capital of India, almost all major Indian corporates, as well as leading Indian PSUs and MNCs, have their offices in the city. Traditionally, Nariman Point in South Mumbai (the traditional Central Business District) was the preferred location for high-grade office occupiers, and therefore for commercial office space investors. However, today Bandra-Kurla Complex (BKC) has emerged as an alternative location to the traditional CBD. It has become more acceptable to MNCs as it offers a better built environment. 

The Suburban Business District (SBD) in the North of Mumbai is also a major commercial office market. Geographically, this micro-market includes all areas of Andheri, Jogeshwari and Juhu. However, a lot of the Grade A office buildings are to be found in the Andheri East area. 

Andheri East is a mixed land use precinct with some of the most prominent hospitality and industrial developments in its vicinity. The core reason for this is its proximity to Mumbai’s International Airport. Demand for commercial spaces is also generated by good connectivity to the eastern part of the city through the Andheri-Kurla Road and Jogeshwari Vikhroli Link Road (JVLR). Andheri railway station is one of the busiest stations in the city.

The demand for office spaces in this location is driven primarily by media houses, the IT/ITeS sector and pharmaceutical companies. The major occupiers in this micro-market are mainly concentrated on the Andheri-Kurla Road. There is a significant difference in neighbourhood profiles, development scenarios and user perceptions of the established commercial areas on Andheri-Kurla Road versus the immediate site vicinity. This translates into a significant difference in capital values as well as rentals in office buildings across the various locations within this single micro-market. The current average rentals for Grade A properties along the Andheri-Kurla Road are in the range of Rs 115-125 per sq ft per month. 

The Andheri-Kurla Road is dotted with corporate office space developments. Apart from the multi-occupier buildings, there are a substantial number of built-to-suit office blocks in the area.

Andheri East is an attractive destination from an investment perspective. Currently, the residential property prices in Andheri East range from Rs 16,000-20,000 per sq ft on built-up basis, depending on the exact location, age of the building, amenities available, construction stage (if under construction), and builder’s brand.

The writer is chairman, ANAROCK Property Consultants