In a major cost saving exercise, the A V Birla group of companies has decided to move out of the prime location of Nariman Point and adjacent areas.
The group, headed by Kumaramangalam Birla, will now hold about one lakh square feet of office space in Andheri, a Mumbai suburb. The companies plan to shift out over the course of a year.
The relocation, which will release more than 40,000 square feet area in the prime commercial hub of the city, is expected to cause a further slump in lease rentals. Lease rentals in the Nariman Point area have fallen to around Rs 110 per square feet from about Rs 200 two years back.
The group also occupies space in Industry House, along with other companies of the Birla fraternity. This has, however, been retained.
The group, which consists of companies like Grasim Industries, Indian Rayon, Indo-Gulf Fertilisers, Vikram Ispat and Birla Global, has offices in buildings like Sakhar Bhavan, Jolly Maker, Mittal Towers, Dalamal House, Apeejay House, etc.Sources feel there is no point in spending money by staying in Nariman Point as most work can be done from the suburbs.
Even the finance departments will not be based in Nariman Point since a corporate has to meet bankers only about once or twice a year to negotiate credit limits.
Off late, many companies have been moving out of Nariman Point to places like Andheri, the Bandra-Kurla complex and the mill lands in Worli. This has lead to a slump in prices in Nariman Point. The situation is so bad that vacated office spaces are often left unoccupied for quite some time.
