According to a report released by property consultant Colliers Jardine, a large number of inquiries have come from insurance companies looking for state-of-the-art offices furnished with the latest equipment. Ever since the government announced opening up of the sector to private players, property consultants have been inundated with enquiries from insurance companies wanting to set up offices in the last three to four months.

An official from another property consultant, Knight Frank informed that about six major companies are about to sign deals for large office space in Mumbai. He added, "most of the companies still prefer Nariman Point for setting up head offices. For back offices and other operations, they prefer suburbs, as it is more economical." The report says that most of the insurance companies prefer A grade buildings in prominent locations for head offices.

Two deals have been signed recently by insurance companies. The first major transaction was by HDFC Standard Life Insurance Company at the IL&FS Centre, a new world-class development in the Bandra-Kurla Complex. HDFC has bought 21,644 square feet on the fifth floor of the building for Rs 21.7 crore at the rate of Rs 10,000/ square feet. In another big deal, Max New York Life Insurance bought 66,000 square feet of office space at Gurgaon near Delhi. Swiss Re, another insurance company leased office space at the Free Press House in Nariman Point for their head office operations.

According to a report by Knight Frank, the insurance sector will also see a considerable amount of demand for large space in the city. "The scenario will be similar to most of the IT companies, where large space will be identified in the suburbs for back office operations and the marketing departments will be in prime locations in the city," says the report.

While the trend for offices to move away from the city continues, property consultants report that majority of the companies still enquire for space in the city. In the last one year, about 0.34 million square feet of quality office space was added to the Mumbai office market. South Mumbai, particularly Nariman Point, felt a scarcity of 5000-odd square feet of space, according to experts.

The South Central region of Mumbai comprising the interior mill areas of Parel had companies seeking larger spaces at lower values. Bandra-Kurla and Andheri-Kurla emerged as the most favoured business district for companies over the last quarter.