Nariman Point's revival: Office rents expected to nearly double by 2030

The report, titled 'South Mumbai – A Renaissance', attributes this expected surge to ongoing infrastructure improvements and rising demand for premium office space in the area.

In Short

• Nariman Point office rents to nearly double by 2030
• Nariman Point outpaces BKC, Bengaluru, NCR in rent growth
• Infrastructure projects boost Nariman Point's appeal

Office rents in Nariman Point, one of Mumbai's most iconic commercial hubs, are set to nearly double by 2030, according to a new report by real estate consultancy Knight Frank. The report, titled 'South Mumbai – A Renaissance', attributes this expected surge to ongoing infrastructure improvements and rising demand for premium office space in the area.

Currently, office space rents at Nariman Point stand at Rs 569 per sq ft. However, by 2030, this figure is projected to rise to Rs 1,091 per sq ft, nearly doubling over the next few years. This anticipated growth highlights Nariman Point's return to prominence as a major business district after facing years of declining interest.

Growth in premium office space

The report estimates that South Mumbai will add 4 to 6 million sq ft of mixed-use office space over the next 6 to 8 years, benefiting areas like Nariman Point. From 2018 to the first half of 2024, rents in Nariman Point have already surged by 52%, outpacing other business districts in Mumbai such as Bandra Kurla Complex (BKC), where rents grew by 20% in the same period. In contrast, top rentals in Bengaluru and the National Capital Region (NCR) declined by 4% and 7%, respectively, according to Knight Frank’s findings.

Nariman Point’s growing appeal is further evidenced by its current rental rates, which have surpassed those of central business districts in Bengaluru (Rs 353 per sq ft) and NCR (Rs 429 per sq ft). The area is now outperforming these regions, driven by renewed interest from businesses looking for premium office space.

In the early 2000s, Nariman Point was Mumbai’s premier business hub, with office rents steadily climbing from Rs 200 per sq ft in 2003 to Rs 550 per sq ft in 2007. However, the global financial crisis and the growing popularity of newer business districts like BKC led to a decline in Nariman Point’s office rental rates. By 2012, rents had dropped to Rs 402 per sq ft, and by 2018, they had further decreased to Rs 375 per sq ft, making it less competitive than newer commercial areas.

Despite these challenges, Nariman Point’s office rents have rebounded significantly. By the first half of 2024, top rental prices had reached Rs 569 per sq ft, reflecting strong demand for premium office space in the area.

Infrastructure and economic revival

The report highlights that the area’s resurgence is largely due to ongoing infrastructure projects, which are enhancing Nariman Point’s connectivity and appeal. These developments, combined with the area's strong residential market, are making Nariman Point an attractive location for businesses and investors.

“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,” the report noted.

Shishir Baijal, Chairman and Managing Director of Knight Frank India, said, “The 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 revitalisation and long-term commercial sustainability.”