Mumbai to Sell Offices in Reclaimed Marshland for $94 Million

Mumbai has long been the fastest growing city in India and one of the fastest in the world. Thus real estate and office space demand in this already burdened city and its subsequent effect on the economy and price levels in the city, as well as the country as a whole is a fascinating topic of discussion.
This article talks about new office land buildup in one of Mumbai's emerging business districts in Bandra-Kurla being sold at a maximum price of $94 million, and the further impact this has on real estate demand. The MMRDA plans to sell 14500 meters of built up area in this locality at a reserve price of $6500 per square meter to businesses primarily dealing with the nation's capital markets. Companies such as Citigroup Inc., Standard Chartered Plc. and Nomura Inc. are some of the major potential bidders to this new development.
This sale and many like it in the city are being spurred by growing demand for land area in the congested, landlocked city. This effect is further compounded by foreign generated demand created by multinational companies setting up hubs in Mumbai. Finally an 81% rally in the benchmark stock exchange in 2009 also helped revive recent developer interest.
This new business area in Bandra has also been connected with a public metro rail and cuts travel time to the airport significantly. This additional government spending and other such necessary support investments may help the economy as a whole in the future.
Finally, the Reserve Bank of India has slashed interest rates to a record low in an attempt to keep the Indian Economy away from recession and maintain demand. The interesting thing in this situation is to oversee and possibly predict the outcome of such demand driven investment and asset oriented spending on price levels in the economy and in the real estate market in particular. Indias economy is the second fastest growing major economy after China. GDP rose by 7.9% for the 3 months ending on September 30th. Due to this newfound growth India is already having to tackle increasing problems of income disparity and rising inflation (some sectors in particular, eg. food prices) and this further addition in land investment in this stage of the business cycle could indeed make the fight to keep inflation low a daunting challenge indeed and create an interesting but potentially destructive scenario for the city and the country as a whole to deal with in the near future.