Mumbai: Navi Mumbai is emerging as the most sought-after destination for corporates and developers to build office and industrial parks, after established commercial office markets such as Pune, Bengaluru and Gurugram.
Planned infrastructure, proximity to larger cities such as Mumbai and Pune, affordable rentals and availability of land and talent have prompted many companies to set up their back-end offices in the region.
According to data from property consultant JLL India, about 8 million sq ft of office space across several IT and non-IT parks is poised to come up across Navi Mumbai’s 344 sq.km in the next five years.
The City and Industrial Development Corporation of Maharashtra Ltd (Cidco), the government body responsible for developing Navi Mumbai, also plans to develop a corporate park over 120 hectares at Kharghar, which will be twice the size of Bandra Kurla Complex (BKC), Mumbai’s premium central business district (CBD).
At present, Navi Mumbai has around 18 million sq. ft of operational office space.
A Cidco spokesperson said the agency has finalised Mumbai-based planning and architecture firm Edifice Consultants Pvt. Ltd to design the Kharghar business park. Once it’s built, it will be open for leasing or selling to companies. At present, Cidco operates two IT parks with a total of 1.6 million sq ft office space, at Vashi and Belapur (in Navi Mumbai). Both these parks are fully occupied.
Real estate consultants estimate that demand for office space would jump further because of the upcoming Navi Mumbai International airport, apart from improved rail and road connectivity.
Gautam Saraf, managing director (Mumbai) of property advisory Cushman and Wakefield, said office space absorption in Navi Mumbai jumped from 300,000 sq ft to 1-1.5 million sq ft in the last five years.
Recently, Singapore-based Ascendas Singbridge bought two under-construction office buildings for Rs930 crore from real estate firm Aurum Venture, which is building a 5 million sq ft IT park called Q PARĆ at Ghansoli in Navi Mumbai. K Raheja Corp, which is one of the largest commercial office developers in the region and operates three IT parks under the Mindspace and Gigaplex brands, is adding 2-3 million sq ft to its portfolio.
“The growth of this micro-market is also driven by the combination of cost-effective rentals and availability of good human resource," said Vinod Rohira, managing director, K Raheja Corp. More than 70 large IT and financial companies, including Accenture, L&T Infotech, Capgemini, UBS and Axis Bank, operate out of these parks.
Sanjay Dasgupta, chief executive officer of Ascendas Property Fund Trustee Pte Ltd, said multinational companies (MNCs) have started accepting Navi Mumbai as a viable location over the last three years.
“We are also seeing rentals in Navi mumbai shooting up to Rs50-52 per sq ft from Rs27-28 per sq ft about six-seven years ago," he said.
Mumbai-based Raheja Universal is building its first commercial office portfolio with plans to set up Raheja District, a mixed-use office park with around 15 million sq ft space, at Juinagar. The 100-acre office park will also have the World Trade Centre (WTC) towers.
“Construction of the towers will start post monsoon," said Ashish Raheja, managing director, Raheja Universal.
Not only Mumbai developers, but large Bengaluru and Pune-based firms like Embassy Group and Panchshil Realty have been scouting for space in Navi Mumbai to set up IT and industrial parks.
Global firms, including Taiwan-based Foxconn and Sweden’s furniture company IKEA, are on their way to set up shop in the country within the region. Foxconn has leased around 2 lakh sq ft in Raheja District to set up a facility to assemble mobile phones. IKEA is opening its second store in India, at Navi Mumbai, with an investment of Rs1,000 crore.
“Compared to other strong IT corridors in the country, land prices are still cheap here. The ballpark range for land transaction in the area is about $1 million per acre. With that kind of a price, it is a very lucrative market," Saraf said.