Prices of office spaces in BKC dip by 10%

Mumbai: The uncertain economic climate and excess supply seem to be putting pressure on the commercial office space market in the international banking and finance district of the Bandra-Kurla Complex (BKC). 
    Capital values and rentals quoted for underconstruction office space have dipped by almost 10% to touch 2009 levels. Wadhwa Group is quoting roughly Rs 27,000 a sq ft for its recently launched One BKC building it is constructing on C66, the plot it bought from Reliance Industries two years ago. Of a developable space of about 15 lakh sq ft, the developer has already sold 2-3 lakh sq ft at Rs 26,000 a sq ft. Managing director of Wadhwa Group Sanjay Chhabaria said they were quoting Rs 28,000 a sq ft for One BKC. Property consultants say Godrej Properties Ltd, that is expected to launch its project in the next few months, is also quoting a similar rate of Rs 27,000 a sq ft. The office building is coming up on C68, a 12 lakh sq ft plot, for which Godrej signed a joint venture agreement with Jet Airways three years ago.Till 2011, developers quoted roughly Rs 30,000 a sq ft for under-construction property. Ready office space currently is quoted at Rs 32,000 a sq ft. 
    Both these projects are expected to add roughly 20 lakh sq ft supply in the BKC office market in the next three years. Consultants say this supply will put pressure on the prices at a time when roughly six to eight lakh sq ft of ready to nearly completed office space is still lying vacant. Majority of this space is concentrated in FIFC Tower and The Capital at BKC. 
    Said Anshuman Magazine, managing director of CBRE, global property consultants, "With so much of supply coming in the BKC, I expect the office space prices to drop by about 10% in the short run of about one to two years. The reason for this is the slowdown in demand for space from corporates and multinational corporations in light of sluggish economic conditions.''