In one of the biggest front office transactions so far this year, consumer durable major Samsung India Electronics has leased 1.10 lakh sq ft office space in Oberoi Realty’s commercial complex Commerz II in Goregaon suburb of Mumbai, said two persons familiar with the development.
The company will be paying rentals of Rs 145 per sq ft a month, taking the total annual rentals to over Rs 19 crore. The lease is for total 9 years with 15% rental escalation every 3 years.
“The deal was in the making for some time. However, after final negotiations, it was concluded on Friday,” said one of the persons mentioned above.
Oberoi Realty CMD Vikas Oberoi confirmed the transaction, while ET’s email query to Samsung India remained unanswered until the time of going to press. Transaction advisor JLL India declined to comment for the story.
In September, Teva Pharmaceutical Industries leased 1.25 lakh sq ft office space on lease in Oberoi Realty’s same project.
“Headquarter locations in Mumbai have started shifting further north into micro-markets like Goregaon, Powai and Vikhroli especially when the space take up is 50,000-75,000 sq ft. This is more pronounced when the projects are mixed used developments with residential and retail options. I believe, corporates are being sensitive to employee needs and are trying to create work-life balance. Lowering commute time to office, offering education & recreational facilities could be the major reasons for selecting some of these projects,” said Raja Raja Seetharaman, Director of commercial realty data information and analytics firm Propstack.
Recent flows of transactions indicate that the office property market in the country’s commercial capital continues to flourish. Low vacancy levels across office complexes and lack of new ready-to-move-in commercial space are contributing to the rents firming up.
Recently, co-working space provider WeWork is betting big on India and has taken on lease two buildings in Bengaluru and Mumbai with a total space of 3.3 lakh sq ft. This includes a 1.9lakh sq ft standalone building owned by Enam Securities Group in Mumbai’s commercial business district Bandra Kurla Complex. The building’s rental is Rs 225 per sq ft, taking the rent to Rs 4 crore per month.