Locating your office place

By A.T. Bureau

Twenty years after the Regional Plan was sanctioned the context has changed both in terms of growth characteristics of Mumbai as well as the broader economic policy framework within which Mumbai’s role in the national and global economy has to be defined. Mumbai, the commercial capital of India has unique landscape and its distribution.

On May 4, 1992, the Government of Maharashtra introduced the new industrial Location policy for Bombay Metropolitan Region (BMR) . Making significant departure from the old policy, the new policy had redefined the 4 zones of the old policy into 3 new zones and removed the distinction between small and large-scale industries. Instead, it has classified industries into three groups largely on the basis of this environmental impact. The policy allows new non-polluting, high-tech, and high value added industries in greater Mumbai, Thane and Mira-Bhayander areas. It prohibits and new highly polluting industries or expansion of existing units in these areas.

Because of this policy, many industries were shifted out of Mumbai. Hence huge industrial galas were in the market. Almost 60% of industrial galas are now occupied by offices instead of industries.

Driven by the objectives of containing Greater Mumbai’s population and decongestion of South Mumbai the Regional Plan, 1973 recommended restrictions on new office growth in South Mumbai and relocation of offices and wholesale establishment to Navi Mumbai and Bandra-Kurla Complex. In 1977, the BMRDA (Now MMRDA) notification disallowed new office development in Island City without BMRDA’s permission. These provisions have been adopted in the Development Control Regulations for Greater Mumbai in 1991.

This resulted an acute shortage of new office premises and the rates were increased many fold. In Bandra-Kurla Complex (BKC) also, the MMRDA never allowed small offices to be established with a policy to sale large plots to individual corporates only. Hence the rates of BKC were out of reach for small office.

Forced by the provisions, small offices of upto 10,000 sq.ft. started searching the new destination. This resulted in decentralisation of commercial activities and space all over Mumbai and its suburbs.

The fair rate in Andheri East, where SEEPZ and MIDC were established, attracted many such offices. It is now biggest commercial hub, in Mumbai. The area has many five start hotel, international and domestic airport within. Free trade zones industrial zones and 90% of industrial estates.

The rates still are affordable and can accommodate need of almost 5 crore sq.ft.

Due to heavy congestion the demand shifted to Powai. Many corporate shifted their headquarter in Powai. But lately, because of terrific conditions,  they are now closing their operations and searching new destination.

Malad link road was recently opened up for commercial space and large commercial space and huge commercial space was offered for down to earth price. The area is emerging as new commercial destination. But it has it own limitation. It is far from international airport and surrounded by residential buildings hence the infrastructure required for commercial of space is restricted.

Kalina and CST road are new areas and got the overflow of BKC. Well connected with Central and Western Suburban rail, bus and stone throwing distance from BKC , the area came into spotlight after announcement of Santacruz – Chembur link road project. The area has limited space hence the rates are still out of reach.

Due to revolution in communication, offices were established in residential zones and near the stations. Almost all new projects near the stations. Almost all new projects near the suburb railway station were marked for commercial use only. Commercial premises fetch 200% more selling rates and super built-up of 100%. It is a thumb rule in the industry to sell commercial space with 100% or more super built up area.

South Mumbai has limited space and 90% of it is on rent or on collectors land paying whooping property taxes and statutory rent.

Where as suburbs has everything and anything for every need and budget. Now Mill land has come in between and breaking the balance. It is unlikely to effect on the demand in suburbs.

Posted on 10th January 2006