Rise of BKC as Mumbai SBD

Bandra Kurla Complex (BKC) is the first in the string of new growth hubs that is being planned by Mumbai Metropolitan Region Development Authority (MMRDA) in Greater Mumbai to help seize further concentration of offices and commercial real estate activities in South Mumbai.

Bandra Kurla Complex, Mumbai's secondary business district (SBD), has office space of nearly 12 million sq. ft. It is in close proximity to the new Diamond Bourse, which boasts of 1 million sq.ft of trading space.

The commercial development in BKC includes private and government offices (state and central), banks, wholesale establishments, etc. and eventually provide approx. 2-lakh jobs in the region.

Suburban Business Districts of BKC are festooned with sprawling malls and modish office buildings. It houses companies like Citigroup, IL&FS, ICICI Bank, Bank of India, State Bank of India and number of financial institutions.

Owing to high demand and limited new supply during the past few years the rental and capital values for office properties in most parts of Mumbai have escalated.

But with the supply side boom in Mumbai commercial real estate during the later half of 2008 and in 2009, the commercial property rentals, which have shoot off the roof, are expected to calm down by the end of this year, say industry experts.

The rentals in Bandra Kurla, which had nearly touched Rs 450 per sq. ft, may possibly come down to Rs 350 to Rs 375 per sq. ft, reveals market sources.

There are several office projects on the horizon in the CBD areas of Mumbai. Some of these office projects and are likely to be completed soon in BKC, Goregaon, Andheri east and the mill land developments in SBD.

Moreover, with MMRDA increasing the floor space index in BKC from 1.53 to 4, one could anticipate additional supply to enter the Mumbai commercial property market, which will help stabilizing the office capital and rental values further, industry reports. But the demand side is expected to continue being robust, states Mumbai property agents.

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