MUMBAI: Mumbai's property prices have soared 100% in the past 12 months despite a crumbling infrastructure, crater-filled roads, the bomb blasts and the declining quality of public services. The trend is sharper in business areas like Nariman Point, Bandra, Parel and Worli. Foreign companies eager to cash in on the economic boom are snapping up office space, boosting property developers who are rushing to the stock market to raise funds.

According to trade watchers, a square feet of space in Nariman Point now fetches Rs 25,000-40,000. The price is higher for sea-facing properties. Some residential apartments in Nariman Point are known to have fetched as high as Rs 60,000 sq feet, but experts say that these were in new buildings or involved prime property. Commercial property prices in old buildings are also fetching a huge premium, they say.

Chetan Suchak of Suchak Realties cited the lack of new properties coming up in prime locations as a reason for rising prices. "There has been no significant addition of office space in Nariman Point. This is pushing the prices up," he said. "The property which was sold for Rs 8,000 per sq ft in Nariman Point last October has now been traded for Rs 20,000 per sq ft," Mr Suchak said.

Prices have also shot up in the suburbs, though not as high as in central Mumbai. Realty rates range between Rs 5,000 and Rs 6,000 per sq ft in the western suburbs of Goregaon and Malad. In central suburbs like Thane, prices are around Rs 3,800-4,000 per sq ft.
"Mumbai continues to attract business despite all odds," said a state government official. There is a shortage of commercial space in the city though the housing segment is growing, he added.

"Many MNCs or business houses are scouting for space in Mumbai, further boosting demand," an official from the industry department said. Lehman Brothers is among the major foreign players to have bought land in Mumbai. The US-based financial giant is understood to have signed a deal for a property at Worli for a price much above the prevailing rates, sources say. Another South India-based leading finance company has also booked office space at Nariman Point for a hefty price.