The following news article about the impending exodus of finance powerhouses from Nariman Point, the CBD of Mumbai; is not surprising. Infact, some would wonder why it took so long.
Since the 90’s we have had proclamations from politicians wanting to make Mumbai the next Shanghai, Singapore or Dubai; depending on the flavor of the month.
What most people dont realize is that Nariman Point is over 40 years old in the present form. And its buildings are crumbling or in poor shape. And the rents are double that of Midtown Manhattan.
Infrastructure wise, its not as bad as other parts of Mumbai. However it would serve some owners well to demolish and build more efficient buildings, in terms of space, design and sustainability. Then the sky-high rents are justified.
Inevitably it may happen. As more and more businesses move away, owners might do just that. I’d rather they be proctive about it, than doing it as a reaction to market forces alone.
UBS, JP Morgan lead Nariman Point exodus
MUMBAI: UBS AG and JPMorgan Chase & Co. are leading an exodus of finance companies from Mumbai’s Nariman Point financial district as they balk at paying double midtown-Manhattan rents for crumbling four-decade-old buildings.
UBS, Switzerland’s biggest bank, moved to a new complex on the site of a drive-in cinema about nine miles north. JPMorgan, the second-biggest US lender, shifted to an adjacent suburb, while private-equity firm KKR & Co. went about three miles north of Nariman Point. Axis Bank and broker Motilal Oswal Financial Services are moving in the next year.
They are departing a district reclaimed from the Arabian Sea in 1940 that is marred by traffic jams and poor sanitation, and constrained by a 46 year old law that limits building height. The city’s shortcomings and fragmentation may hinder Mumbai, with the fourth-most expensive office space in the world, from establishing a financial center to rival Shanghai and Dubai.
"Transforming Mumbai into a world class financial center is very distant," said Sunil Saberwal, chief executive officer of Bombay First, an organization modeled on London First to work towards the regeneration of Mumbai. "We are at least 15 to 20 years away from something like that. Even then, Mumbai will not be as beautiful as Dubai, but it will be functional."
If Mumbai doesn’t get its act together by 2030 by improving transportation, housing and water systems, and reducing costs, the city may lose out to places such as Dubai as Western companies seek a base in the time zone, Saberwal said.
Continue reading at BloombergUTV