Brokers shift base to suburbs to save on rents (1) March 27, 2009
Posted by dhirendra1972 in Cost Cutting, Efficient Operations, Hard lookLarge Space, Sinking Margin.Tags: Broking Business, Broking Houses, Cost Cut, Institutional Part, Lease, Margin, Objectives, Operations, Property, Rentals, South Mumbai, Suburbs, Volume
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Good morning friends. Start of the week, start of the day means start of a good work. But of course, I have to do my routine in knowing all what is happening in our surroundings. With reference to The Economic Times institutional parts of the broking business continue to be housed in upmarket South Mumbai. The institutional business continues to function out. India Infoline gave up two floors in the stock exchange building.
Faced with dipping volumes and shrinking margins, broking houses are doing what they could to cut costs. One method being employed is to take a hard look at the rentals that they pay for their offices. This is when their lease deeds are due for renewals.
Here’s how it’s playing out. While some of the institutional parts of the broking business continue to be housed in upmarket South Mumbai, the retail side to the business with a back-office is being moved to suburbs. This helps achieve two objectives — getting large space in one location resulting in operations being efficient coupled with dropping rentals.
If the rentals in a area like Nariman Point are in the range of Rs 250-400 per square foot, a property in the suburbs could be as low as Rs 80-120 per sq ft. With a large number of employees residing in the suburbs, the new arrangement becomes convenient for them to get to work from their homes.
