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Mumbai: Western suburbs’ micro-market registers highest growth in rentals

Outside Mumbai city, rentals rose in Thane by 2.5 per cent and Navi Mumbai by 0.7 per cent year on year.

By: Express News Service | Mumbai |
December 17, 2016 3:06:14 am

The gross average rents in Mumbai (including Thane and Navi Mumbai) in the third quarter of fiscal 2017 rose by 1.3 per cent year on year, according to a research report by real estate consultancy firm, JLL India . In Mumbai, the western suburbs’ micro-market registered the highest growth in rentals at 2.1 per cent followed by the eastern suburbs at 1.7 per cent, Secondary Business District (SBD) Bandra Kurla Complex at 1.5 per cent, SBD in Central Mumbai at 1.4 per cent and SBD in North Mumbai at 1.2 per cent.

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The rents in the Central Business District (CBD) of Mumbai continued their southward journey and declined by 1.6%. Outside Mumbai city, rentals rose in Thane by 2.5 per cent and Navi Mumbai by 0.7 per cent year on year, said the JLL report.

“Showing faith in India’s economic growth, corporate occupiers have been in expansionary mode. However, there is a lack of relevant supply at ideal locations in Mumbai. Due to this, some companies wanting to expand are taking up relevant supply at ideal locations in both the eastern and western suburbs,” said Ashutosh Limaye, National Director – Research at JLL India.

“The suburbs have been cheaper, rent-wise, than the established office districts. Many back offices have preferred these locations over the years, due to their cost arbitrage,” Limaye added. A foreign pharma company has recently carried out a large transaction in a grade-A building in the western suburbs. According to JLL, Mumbai suburbs could see more such developments in the future with big infrastructure projects such as the coastal road and several phases of metro rail in the pipeline.

“They have another advantage of being closer to residential areas. We could see more corporate occupiers moving in if relevant supply comes up here,” said the JLL report.

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