Bandra Kurla Complex, created as an alternative central business district to Mumbai, has eight million sqft stock of office space.
The vacancy level in BKC is about 16 per cent. An additional supply of 2.5 millions sqft is expected to come in 2012, said Mr Ramesh Nair, Managing Director - West, Jones Lang LaSalle India.
Despite the economic uncertainty which haunts the BFSI sector in Europe and the US , BKC's office market continues to grow.
With major institutions setting up offices there, leasing and buying continued to accelerate in the last two quarters. The rent correction appeared to be complete, with most existing buildings and new projects recording flat rates or slight increases over the prior quarter, he said.
Mr Nair felt market conditions in BKC have begun to shift from tenant-favouring to neutral.
While tenants prepared to make commitments in the short term continue to have leverage, the opportunity to secure attractive long-term rental rates and quality space would begin to dwindle by 2012-end. This may prompt some tenants to lower-priced markets such as Lower Parel.
With the diamond bourse to be operational in a two million sqft complex soon, the people churn and traffic at BKC would increase multi-fold.
How the Mumbai Metropolitan Development Authority will address this remains to seen.
However, the two big game-changers in the BKC's micro-market will be the re-development of the MHADA Government colony and the 18-acre Reliance Industries plot.
The plot would bring in two to three million sqft of office space into the market, he said.