ICICI Prudential buys office space in Mumbai’s BKC for Rs147crore
ICICI Prudential has bought the space at the rate of Rs40,960 per sq. ft on carpet area basis
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Mumbai: At a time when housing sales are yet to recover from a three-year slowdown, transactions in commercial real estate continue to see an uptick.
In yet another commercial office deal, ICICI Prudential Life Insurance Co. Ltd has acquired an entire floor of 35,000 sq. ft office space at Crescenzo building at Mumbai’s financial district Bandra-Kurla Complex (BKC) for Rs147 crore, according to two people aware of the development.
The space has been bought by ICICI Prudential at the rate of Rs40,960 per sq. ft on carpet area basis. It is currently on lease by Tata Communications at a rent of Rs177 per sq. ft per month, said the first person mentioned above.
Mumbai-based real estate firm Parinee Group, which developed the 20-storey Crescenzo building, confirmed the transaction.
“We have sold one entire floor comprising of approximately 35,000 sq. ft. of carpet area to ICICI Prudential Life Insurance Company for Rs147 Crore,” Vipul Shah, managing director, Parinee Group told Mint.
Shah said the deal has been concluded at an attractive rental yields of around 7.25%. “There is a very good demand uptick for commercial real estate with lot of money flow chasing limited Grade A Office Spaces,” he said.
However, it is not clear if ICICI Prudential has bought it for investment purpose or plans to move in the building later. The company has not yet responded to the email sent seeking confirmation on the development.
According to Abhishek Tiwari, founder of CRE Matrix, a Mumbai-based real estate analytics firm, demand for quality office properties at BKC far exceeds the supply. Several funds and investors are eyeing to invest in preleased properties as they have lower risk and provides a stable cash flow.
“There is a greater interest towards commercial real estate as residential segment sees a slowdown in the last two-three years. Funds, ultra high net worth individuals (HNIs) and investors are interested in picking up preleased properties as they have lower risk,” Abhishek Tiwari, founder, CRE Matrix, a Mumbai-based real estate analytics firm.
In 2016, Indian realty market saw its biggest commercial real estate deal when Canada-based Brookfield Asset Management Inc. acquired office and retail assets of Hiranandani Developers Pvt. Ltd at Powai, a suburb in Mumbai for close to $1 billion.
Leasing transactions also continued to pick up momentum this year.
In January, New York-headquartered office rental firm WeWork signed of the biggest leasing deals by taking up an entire 16-storey ENAM Sambhav building at BKC for a monthly rental of Rs4.3 crore.
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