Peak office rent at Nariman Point rises 52% since 2018 to Rs 569/sq ft: Knight Frank

Mumbai: Maximum office rent at Nariman Point in Mumbai has touched Rs 569 per square foot, up 52 per cent since 2018, Knight Frank India on Thursday said, projecting over 90 per cent growth in rentals by 2030 on strong demand.

On Thursday, real estate consultant Knight Frank India released a report 'South Mumbai -- A Renaissance', highlighting how ongoing enhancements in transit-related infrastructure are expected to drive the revitalisation of South Mumbai.

These infrastructure improvements are set to significantly increase the appeal of the area for both businesses and investors, it added.

"Notably, office rentals in Nariman Point, one of the city's most iconic commercial districts, are projected to see a sharp rise. Top (maximum) rentals in Nariman Point will increase from the current Rs 569 per sq ft to Rs 1,091 per sq ft by 2030, reflecting strong demand for premium office space in the area," the consultant said.

In the early 2000s, Nariman Point was Mumbai's premier business hub, with rental rising steadily from Rs 200 per sq ft in 2003 to Rs 550 per sq ft in 2007.

However, the global financial crisis and the increasing appeal of Bandra Kurla Complex (BKC) led to downward trajectory in office rental to Rs 402 per sq ft in 2012.

By 2018, Nariman Point's rental price further depreciated to Rs 375 per sq ft, significantly lower than Rs 833 per sq ft at BKC and Rs 460 per sq ft in the NCR.

However, the top rental prices in Nariman Point appreciated to Rs 569 per sq ft by the first half of 2024, surpassing top rentals of leading central business districts of both Bengaluru (Rs 353 per sq ft) and NCR (Rs 429 per sq ft).

"Between 2018 till H1 2024, top rental rates in Nariman Point have surged by 52 per cent, significantly outpacing rental growth of BKC, where rents have grown by 20 per cent," Knight Frank said.

In contrast, top rentals in Bengaluru and the National Capital Region (NCR) have experienced a decline, dropping 4 per cent and 7 per cent, respectively.

Knight Frank India Chairman & Managing Director Shishir Baijal said, "South Mumbai is witnessing a renaissance, spurred by the transformation of strategic infrastructure across the city. This renewed interest in premium office spaces is already reflected in rising property prices." The convergence of enhanced infrastructure and a strong residential market strengthens Nariman Point's standing as a premier commercial hub, creating promising opportunities for investors and businesses alike, he added.

"As infrastructure-driven economic growth continues, we expect more companies to be drawn to the area, contributing to its revitalization and long-term commercial sustainability," Baijal said.