- South Mumbai projected to add 4-6 mn sq ft of mixed-use office space in the next 6-8 years
- Nariman Point’s rents surged by 52% to INR 569 per sq ft from 2018 to H1 2024
Mumbai, October 10, 2024:
Knight Frank India’s latest report, South Mumbai – A Renaissance, highlights 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. Notably, office rentals in Nariman Point, one of the city’s most iconic commercial districts, are projected to see a sharp rise. The report forecasts that top rentals in Nariman Point will increase from the current INR 569 per sq ft to INR 1,091 per sq ft by 2030, reflecting strong demand for premium office space in the area.
Nariman Point Office Rental Trends (2003 – H1 2024):
In the early 2000s, Nariman Point was Mumbai’s premier business hub, with rental rising steadily from INR 200 per sq ft in 2003 to INR 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 INR 402 per sq. ft. in 2012. By 2018, Nariman Point’s rental price further depreciated to INR 375 per sq ft, significantly lower than BKC’s office rental at INR 833 per sq. ft. and NCR’s office rental at INR 460 per sq ft.
However, the top rental prices in Nariman Point appreciated to INR 569 per sq ft by the first half of 2024, surpassing top rentals of leading central business districts of both Bengaluru (INR 353 per sq ft) and NCR (INR 429 per sq ft). Between 2018 till H1 2024, top rental rates in Nariman Point have surged by 52%, significantly outpacing rental growth of BKC, where rents have grown by 20%. In contrast, top rentals in Bengaluru and the National Capital Region (NCR) have experienced a decline, dropping by 4% and 7%, respectively. This increase is not just a recovery from past lows; it also puts Nariman Point ahead of important commercials markets of Bengaluru and NCR. This rebound is driven by both an increase in demand for premium office spaces in traditional business districts and upcoming infrastructure projects that are enhancing Nariman Point’s connectivity and appeal.
| Rent INR sq. ft) | Nariman Point | BKC | Bengaluru | NCR |
| 2018 | 375 | 833 | 367 | 460 |
| H1 2024 | 569 | 1000 | 353 | 429 |
Source: Knight Frank│ Note: Highest rentals from top-tier buildings for the respective year have been considered
Shishir Baijal, Chairman & Managing Director, Knight Frank India, 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. 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.”
South Mumbai’s Fresh Office Supply: Fresh Office Supply: From Stagnation to Anticipated
South Mumbai’s new office supply is poised for significant growth, with projections of over 4 million to 6 million square feet of fresh mixed-use space added in the next 6 to 8 years—three times the supply seen in the past decade. This upcoming expansion will be fuelled by the redevelopment of vacant land, including parcels owned by the Mumbai Metro Rail Corporation Ltd (MMRCL), Rail Land Development Authority (RLDA), old mills, and unused industrial sites that are now eligible for conversion into modern office spaces. This anticipated growth in South Mumbai’s office market, coupled with major infrastructure upgrades, could restore the area’s status as a premier office destination.
While Mumbai has continued to solidify its position as a key office market, South Mumbai has faced challenges in expanding its office space supply. From 2014 to the first half of 2024, South Mumbai added 1.6 million square feet of office space, accounting for 3% of the total office supply in Mumbai during this period.
The limited supply is due to several factors. The high land costs, along with the scarcity of available plots in this prime location, have complicated large-scale commercial developments. Additionally, the existing office spaces, enhanced by renovations and refurbishments, have been sufficient to meet demand over the past decade.
Recent infrastructure upgrades, especially in transportation and connectivity, combined with growing interest from developers, have rejuvenated the South Mumbai office market. Since 2021, the area has added 0.9 million square feet of office space, exceeding the supply recorded between 2014 and 2020. The region’s share of Mumbai’s overall office supply also experienced a notable increase, with 2023 standing out, contributing 20% of the city’s total new office space. This shift underscores South Mumbai’s rising potential as a key office destination.
Burgeoning Residential Market of South Mumbai:
South Mumbai’s residential market has seen a consistent rise in absorption rates, highlighting its increasing attractiveness as a prime residential destination. Although it represents a smaller portion of Mumbai’s overall market, South Mumbai real estate is distinguished by luxury properties and high-end developments. Since 2016, residential absorption in South Mumbai has surged significantly, surpassing 1,000 units by 2023. This growth is especially impressive given the challenging macroeconomic conditions. The region’s share of the overall residential market has steadily climbed, reaching about 1.4% in the first half of 2024.
Rising Share of South Mumbai in Mumbai’s Total Transactions
While other micro-markets like the Central Suburbs and Navi Mumbai lead in volume, South Mumbai distinguishes itself through high-value transactions driven by their heritage, connectivity, and lifestyle appeal. The growth in South Mumbai’s residential sector reflects not just increased demand for luxury homes but also a broader transformation that complements Nariman Point’s commercial revival. As businesses re-establish or expand in South Mumbai, the availability of nearby luxury residences adds significant value for both employers and employees. This synergy between residential and commercial growth is essential to sustaining Nariman Point’s resurgence as one of Mumbai’s top business hubs.
Share of South Mumbai in Total Supply Rise Post Covid
South Mumbai’s share of residential supply has seen a marked increase in recent years. Starting at just 0.2% in 2016, it gradually rose to 1.5% by 2020. The peak occurred in 2022, with a substantial 4.0% share, primarily driven by heightened demand for premium housing post-COVID, infrastructure improvements, and the resurgence of the city’s commercial hub. This elevated share remained above its decadal average of 1.2%.
Nariman Point’s Timeline
| Year(s) | Key Event |
| 1940s | Reclamation begins, transforming the Arabian Sea into Nariman Point. |
| 1946 | Sir Cowasji Jehangir leads the project; named after Khursheed Nariman. |
| 1950s | Nariman Point starts developing as a commercial district. |
| 1960s | High-rise buildings establish it as a symbol of corporate power. |
| 1970s | Becomes Mumbai’s top business district with soaring real estate prices. |
| 1980s | Peak demand: iconic buildings like Air India and Oberoi Towers rise. |
| 1990s | Infrastructure shows signs of strain; issues with congestion and aging. |
| Early 2000s | Bandra-Kurla Complex emerges, shifting business focus away from Nariman Point. |
| 2010s | Loses status as commercial capital; businesses relocate. |
| 2020-Now | New infrastructure projects enhance connectivity and future appeal. |
~