Mumbai: Singapore’s DBS Bank Ltd is close to leasing nearly 100,000 sq. ft at Express Towers, a 25-storeyed building in Mumbai’s Nariman Point, in one of the biggest office space deals in the business district since the 2008 global financial crisis that prompted many corporates to leave the locality.
The bank is close to signing the lease agreement at a monthly rental of Rs230 per sq. ft, which works out to Rs28 crore a year, three people aware of the development said, on condition of anonymity.
Global private equity firm Blackstone, which jointly owns Express Towers along with Pune-based Panchshil Realty Ltd, declined to comment.
A DBS Bank official involved in the development said the bank, which currently operates from a 72,000 sq. ft office space at Fort House in South Mumbai, has been looking for a more spacious office.
“We have run out of space and we need a bigger office. That’s one of the reasons why we want to move out to a new place. Grade A building with right amenities and good location are some of the factors we have considered while looking out for our new office," said the official.
DBS Bank declined to comment on the development.
The transaction comes at a time when many multinational companies and financial institutions have moved their corporate offices over the last few years either to the city’s upcoming financial hub Bandra Kurla Complex (BKC) or Lower Parel in central Mumbai.
“The global financial crisis was a big trigger for many of the office occupiers to move out of Nariman Point. High rentals was one of the factors but the long term reasons were that the buildings were getting old, the floor plates were much smaller and expansion was not possible for many of the companies. In addition, there was no fresh supply of offices in the area," said Ashutosh Limaye, head of research and real estate intelligence service at JLL India, a property advisory firm.
The last few years saw global banking companies such as Standard Chartered, Morgan Stanley, Deutsche Bank and Citigroup and consumer goods major Hindustan Unilever Ltd shifting their corporate offices to BKC and suburbs such as Andheri.
According to property advisors, leasing activity in Nariman Point has considerably slowed in the last few years, apart from few small deals. From a peak of around ₹ 500 per sq. ft in 2008, rentals in the area have fallen to around ₹ 220 per sq. ft, bringing them even below the BKC rentals of 230-250 per sq. ft.
“Every year, we have seen rentals falling by about Rs3-5 per sq. ft for the last two years," Limaye said.
The last big deals in the area were Indian Hotels Co. Ltd leasing around 32,000 sq. ft and law firm led by Shardul Shroff leasing 26,000 sq ft, both at Express Towers.
Madhurima Nandy in Bengaluru contributed to this story.