>BANDRA KURLA COMPLEX: Mumbai’s second business district (RELIGARE)

Bandra Kurla Complex (BKC), one of Mumbai’s key business destinations, has gradually transformed itself from a secondary district to the city’s second business district (after Nariman Point) and is set to become India’s international financial centre. BKC’s G block, housing leading banks and financial institutions, has secured Maharashtra government’s nod to increase its floor space index (FSI) from 2 to 4. However, development in the block is likely to be spaced out due to the high realty prices stemming from the strong, continued demand and improving connectivity to this well-planned and centrally located business hub.

■ Doubling of FSI to 4 to attract staggered demand: BKC-G block has 9,72,400 sq mt area on two FSI; increase in FSI to four is likely to near double this area over the next few years. However, existing corporates in the G block may choose to expand their present premises depending on their requirement and only if their cost-benefit analysis is favourable. This is because the additional two FSI in G block is likely to be offered at a high rate of ~ Rs 10,000 per sq ft (psf) or 150% of the ready recokner rate. Therefore, expansion at BKC-G block is expected to be staggered over the next four to five years.

■ Realty prices at BKC to remain firm: Despite the doubling of supply to 8-9m sq ft (msf) at BKC-G block, prices of commercial properties at BKC are likely to remain firm in the short to long term on spaced out expansions. Moreover, there are only few plots left for sale by MMRDA where 4 FSI will be applicable. In the shortterm, we expect rentals and capital value to move upwards in tandem with commercial realty prices as transaction volumes soar. We also expect residential prices at BKC to firm up as employees of corporates operating at BKC hold on to their existing accommodation to derive the benefit of a shorter commuting cycle. Nevertheless, realty development at Dharavi, located 1km from BKC, may attract some BKC residents to this area – however, such development is not anticipated in the near future.

■ Upcoming transport projects to boost connectivity: Connectivity to BKC is set to improve under the Mumbai Metro Project as the Charkop-Bandra-Mankhurd corridor would pass through BKC – connecting E and G blocks with Bandra and Kurla, both important business destinations, on either side. The corridor would also connect the G block to the H block with C.S.T road on both sides. In addition, the proposed monorail project will connect Kalangar - Bharat Diamond Bourse - Bandra east station (under phase 1) and Jacob Circle – Chembur- Wadala (under phase 2).

■ Nariman Point, other business locations lose ground: Better infrastructure facilities and affordability has enticed many corporates operating in Mumbai’s other business locations to shift base to BKC. Rentals in BKC are Rs 100psf lower than Nariman point and Fort. Besides, BKC also offers better and faster approachability to the Airport and boasts of better traffic management than other business destinations like Worli, Andheri, and Lower Parel. BKC has also attracted companies looking for outright purchase due to its central location and strong upside potential of its capital value.

To read the full report: BKC