3 Elements that Make Micro-Markets Attractive

In the real estate sector, micro-markets are referred to as subdivisions between geographical regions that have their own separate and significant characteristics. These localities generally have properties at present market rates, thereby making them more lucrative to the majority of the city residents who are not seeking extravagant investments.

When a city or area claims its own market with its rates, location, and viability for investors, then the micro-market level is actually where the purchase decisions are carried out. Areas from Andheri-Goregaon to Dahisar in the west or Ghatkopar-Chandivali to Bhandup-Mulund in the central-east corridor are rising as new mini-business hubs resulting in the rise in demand for homes to live closer to workplaces. 

Let’s take a look at 3 key elements that make micro-markets India attractive to those who wish to purchase properties for commercial or residential purposes: 

Excellent Infrastructure & Connectivity:

Historically, it is seen that proper development of infrastructures such as metros, railways, and roads has demonstrated an optimistic effect on the real estate attributes of a city. When commercial or residential properties are located near strategic connectivity points, it does lean towards commanding a higher valuation. 

When you take into account the swift development of infrastructure, these emerging micro-markets in Mumbai are developing rapidly as realty hotspots for residential or commercial projects. Companies are now moving their workplaces, thereby helping their employees to save time on their daily commute. This is why a 2 BHK flat in Andheri tends to be rated higher as Andheri is a micro-market in Mumbai with it being a hub for residential and commercial properties. 

Fair Real Estate Rates 

The emerging micro-market belt of suburban regions continues to be a hot favourite among buyers who are seeking to be a part of India’s financial hub and economic development. The transportation infrastructure economies have often demonstrated a positive effect on a city’s property market as commercial and residential properties near transportation hubs have an inclination to ask for a premium rate. 

Moreover, all the transport network actions boost the adjacent real estate micro-markets. These regions also provide enhanced physical and social infrastructural facilities like hospitals, schools, and shopping malls which have added to the increased popularity of these areas. 

Affordability

Budget-friendlyhomes or commercial properties can play a big role when it comes to determining the viability of a micro-market. The newer micro-markets are providing apartments that are lighter on the wallet along with a host of amenities and great infrastructure to become a buyer’s paradise. 

Developers are coming up with projects that offer homes in the range of s 1 Crore to 2.25 Crore bracket and are part of expansive townships with existing social & physical infrastructure along with a sprawling space for greenery and a host of modern amenities. 

In a nutshell, these are some of the factors that can make micro-markets incredibly attractive and lucrative to home buyers as well as for commercial purchases. CRE Matrix is a leading real estate data analytics company India that uses micro-markets to analyze real estate data from numerous companies/brands across industries on a pan-India basis. 

For more such exciting analysis and details on real estate, visit our website www.crematrix.com.

Andheri West – What makes it the preferred office and housing destination for developers, investors and homebuyers?

Andheri_ West

Andheri West has witnessed a phenomenal Real Estate transformation over the last 15-20 years. Starting with the Mumbai International Airport and Mumbai suburban local train station to Mumbai’s first Metro Line, two upcoming metro lines and upcoming Coastal Freeway. All these infrastructure developments shall help connect Andheri to all other parts of Mumbai – Northern suburbs, South Mumbai and Eastern Suburbs. Andheri West is one of the prime examples among Mumbai City Micro-markets which boasts an amazing mix of Office buildings, Shopping Centers, Retail High Streets and High-end Residential. Andheri West’s population is approx. 400,000 with about 100,000 households having an average monthly income of INR ~150,000. The housing market in Andheri West has always been buoyant and continues to witness the same trends given consistent new job creation and quality housing development. In 2019 and 2020, Andheri West witnessed housing sales of ~2,200 units and ~1,500 units respectively.

Andheri_West

The total commercial office stock at Andheri West stands at about 4.5Mn sqft. However, there are a greater number of Grade B office buildings in Andheri West compared to Grade A buildings. Given the lack of new Grade A office supply in Andheri West, secondary (older) office sales market has been more active compared to the primary office sales market among investors. The offices market in Andheri West has historically been an investor driven market and we foresee the same trend to continue. Andheri West Offices Capital Values appreciated by 15% in the last 5 years alongside rental yield of approx. ~7%, giving the investor a handsome annual return of ~10% per year. We strongly believe investors will prefer investing in new Grade A buildings compared to older supply. Five new Grade A commercial office buildings are under various stages of construction, totalling to approx. 900,000 sqft. In the past, both occupiers and investors have shown preference for offices sizes up to 2,000 sqft carpet area, primarily because the key occupier sectors have been BFSI, Media & Entertainment, CAs, Lawyers, etc.

Contrary to common belief that Bandra-Khar Linking road is the most active High Street in Mumbai, we would like to differ in opinion. We believe High-Streets of Andheri West have a wider spread not only in terms of size but also in terms of number and quality of retailers. Andheri West High-Streets can offer you everything from clothing to electronics, from jewellery to automobiles, from F&B to fashion accessories. Given the thick housing market, most private and PSU Bank have multiple bank branches and ATMs in Andheri West. Similar to the office asset, the high-streets in Andheri West have offered handsome annual returns of ~12% to its investors.

Related Article: BKC displaced Nariman Point as Mumbai’s CBD! Read on to know why BKC won’t be dethroned in the next 5-7 years.

Covid-19 has only augmented the need for mixed developments and self-sustained micro-markets with all asset types including offices, retail, housing, hospitality, healthcare, education etc. More and more people want to reduce their commute time, Work from Home and aspire to reside in vicinity of all possible recreation choices.  We believe Andheri West is one of the best micro-markets in Mumbai that offers all the above to not only home buyers but also to office commuters. To summarize, solid existing & upcoming infrastructure, robust housing demand, significant presence of high-end Retailer brands in Malls and High-Streets and growing office market, makes Andheri West one of the most attractive real estate investment markets for long-term investors.

For more CRE industry insights and data research do contact us

The ‘Mumbai’s Next CBD’ Debate Settled

BKC as CBD

BKC displaced Nariman Point as Mumbai’s CBD! Read on to know why BKC won’t be dethroned in the next 5-7 years.

Bandra Kurla Complex (BKC) has witnessed a phenomenal transformation over the last 20 years. The State Government set the ball rolling by appointing MMRDA as the special planning authority to develop BKC (Bandra Kurla Complex) as an alternative to the erstwhile CBD (Central Business District) – Nariman Point.

After initial reluctance, some of the Private and PSU Banks and companies shifted their headquarters to BKC. The National Stock Exchange opened its headquarters in BKC in 2001. Soon after, developers realized the potential and picked up land parcels in the region to launch multiple Grade A+ commercial projects. The total stock at BKC stands at about 18 Mn sqft as on year-end 2020. Diamond Bourses (~2 Mn sqft) opened its doors in year 2010. As of today, some of these Grade A+ commercial projects command the highest rent in the country for office space.

BKC currently houses some of the biggest Indian and International businesses including Amazon, Netflix, GIA, Bank of America, GIC, Google, Novartis, Pfizer, Wework, Kotak Bank, National Stock Exchange, SEBI, ONGC etc. These occupiers employ more than 200,000 people who commute to BKC daily, fuelling the growth of social infrastructure such as restaurants, gymkhanas, schools, hotels, luxury housing projects etc. Reliance shall move its headquarters to Jio World Centre, a 7Mn sqft convention centre which is expected to house office spaces, luxury mall, hotels, a performing theatre, convention centre etc.

One of the most well-connected suburbs of Mumbai city, BKC is also the epicentre of most of the major existing and upcoming infrastructure projects – Mumbai Highways, upcoming Metro lines, upcoming Bullet train project, SCLR, Bandra-Worli Sealink, upcoming Coastal freeway etc. Such a central location advantage with convenient connectivity to Northern suburbs, South Mumbai and Eastern Suburbs gives Bandra a big edge over any other micro-market. BKC is also surrounded by prime residential localities such as Bandra West, Khar West, Santacruz West on the West and Chembur, Wadala and Vikhroli on the East. Existing physical Infrastructure makes it easier for residents in these localities to easily commute to BKC. Nearly 85% of all senior employees at BKC reside in these neighbouring suburbs.

We foresee further development in and around Bandra Kurla Complex not only for office complexes but for retail malls, cinemas and hotels over the next 5-7 years. Around 4-5 Mn sqft more Grade A+ commercial office projects are planned which will generate about 50,000 new jobs in BKC over the next 5-7 years. Till then, we can comfortably shelve the case file of ‘CBD of Mumbai’ with a seal of BKC on it.

For more CRE industry insights and data research do contact us