Mumbai: It is likely India’s most expensive office space and comes with an interesting downside.
“People could be going to lunch and get poached,” quips a top banker from one of the many global Who’s Who of the financial community who have scrambled to make it home.
Welcome to Ceejay House.
Hemmed in between the Arabian Sea and the glass-walled Atria shopping mall on Annie Besant Road, this under-construction building in mid-town Mumbai is the most expensive piece of office space in the city and, by many measures, India’s most expensive office building.
Space at Ceejay House leases for an average of Rs375 per sq. ft per month, or about Rs113 crore a year for 250,000 sq. ft. And, it is sold out. The building’s sign may yet be covered with plastic, but many of the lucky occupants have already opened for business in their state-of-the-art offices.
London-based bank Barclays Plc., which has more than $60 billion in global sales, occupies the entire eighth floor and parts of the three floors below. Zurich-based bank Credit Suisse Group has space across from Paris-based bank Societe Generale, just above Barclays. Other tenants include investment bank N.M. Rothschild & Sons Ltd, hedge fund Tiger Global Advise Pvt. Ltd and advocate Satish L. Maneshinde who represents, among others, jailed actor Sanjay Dutt. Private equity firms include Matrix Partners and New Silk Route, which is backed by former McKinsey & Co. chief Rajat Gupta.
Of course, the building’s most well-known occupant is civil aviation minister Praful Patel, who has kept the top four floors, which includes his city residence, sharing some space with investment bank Lehman Brothers Holdings Inc.
Patel was the owner and developer of the building and has sold portions to buyers such as Maneshinde, the Pune-based Poonawala family, who are into breeding horses and making vaccines, and industrial gas manufacturer Inox Air Products Ltd.
Ceejay House is in many ways symbolic of the skyrocketing cost of Mumbai’s commercial real estate amid a rush of foreign players setting up offices in India’s financial capital. Barclays raised the price in 2005 to Rs265 per sq. ft a month from Rs175. Then came along Lehman Brothers, which paid about Rs400, according to real estate experts and a tenant who did not wish to be named.
Prices have continued to rise. At that top end, it’s about $147 per sq. ft a year, against prime property in Manhattan that can start at $80.
Pranay Vakil, chairman of real estate firm Knight Frank, says Mumbai’s real estate prices will eventually correct as 20 million sq. ft of commercial space becomes available over five-seven years. Anuj Puri, managing director of real estate consulting firm Jones Lang LaSalle Meghraj, is betting prices will stay high for at least 12 months. But price does not seem to matter when it comes to wanting a piece of India, at least via Mumbai. Ceejay House tenant Sanjay Bhandarkar, managing director of Rothschild, for one, says firms such as his simply can’t stay out of the Indian market because of escalating real estate prices.
Indeed, demand continues to soar even at outlandish prices. Take Sourav Goswami, managing director of real estate-focused fund Walton Street Capital India Pvt. Ltd, for example. Gosmani wanted in on Ceejay House late last year but just couldn’t find space.
“The demand for centrally located office space, which has been built to international standards of construction, but is flexible related to size of the offices, far outstrips the available inventory in Mumbai,” he says. “Worli is fast becoming the centre of the city and with its impressive tenant base, Ceejay House has become the address to have.”
Ceejay House’s Worli location puts it almost midway between the suburbs and south Mumbai, the city’s traditional business centre. That makes it easily accessible from the airport and does not cut it off completely from the other main business centres, hotels and commercial centres . The added bonus is the relatively less traffic congestion in the area. The proposition is further sweetened by the plush facilities—three sets of elevators for executives, staff and building support, a helipad, and a 24-hour restaurant.
The building’s opulence isn’t quite obvious from the outside, as much of the space is still clogged with scaffolding. Each floor has offices on the perimeter and when finished, a skylight will illuminate the centre cut-out space. And, of course, it offers the one feature that most Mumbaikars would give an arm and leg for: an unhindered view of the sea.