Mumbai city's commercial realty sector has consolidated itself into three distinct business districts over the last five years. These are south Mumbai, central Mumbai and the suburban regions of the city.
A study of the commercial realty sector conducted by Cushman and Wakefield in March 2004 indicates a preference for the central business district (CBD) of south Mumbai and the Bandra Kurla Complex by financial service companies, banks, consulting financial institutions, insurance companies, investment bankers, private equity investment firms and stock broking firms.
The preference for these high-cost realty sectors of the city is attributed to: "The proximity of the CBD to the stock exchange, Reserve Bank of India and Mantralaya which are critical to these business sectors that are image conscious and generally willing to pay for quality," the C&W report says.
The second developing business district is the central region of Mumbai city comprising Worli, Prabhadevi, Lower Parel, Parel, Kalina and Andheri which are preferred by advertising agencies, shipping, pharmaceuticals, processing offices of banks and insurance companies.
For instance Alkem Laboratories has purchased the entire 'Devashish' office building admeasuring 45,000 square feet (built up) in Lower Parel.
These business segments are: "Cost conscious and look for the realty being located close to road and rail routes as a measure to improve the welfare of their staff. These businesses generally require larger floor areas on a contiguous basis," the report states.
The third segment of business houses that mainly include information technology and IT enabled services, business process outsourcing and call centres has staked its claim to the commercial realty sector in the western and central suburbs of Mumbai such as Malad (west), Powai, the Maharashtra Infrastructure Development Corporation (MIDC) area in Andheri (east) to as far as Vikhroli and even Thane district.
According to the C&W report these business centres are space intensive, "Requiring very large and adjacently located floor areas.
The critical parameters for these business segments includes manpower availability, transportation, telecom and power infrastructure."
The leasing transaction by Eserve of 1,25,000 square feet of space within the New Standard Engineering complex in Goregaon (east) in March is cited as an example of this growing geographical preference by certain business segments.