MUMBAI: HSBC recently leased 1.8 lakh sq ft at Nesco IT Park in Goregaon for a monthly lease rent of about Rs 1.8 crore or Rs 95 per sq ft a month. In May, UK-based banking major Barclays leased 1.8 lakh sq ft of space at Nirlon Knowledge Park in Goregaon for its back-end operations at Rs 95 per sq ft.
HSBC has also registered another office space deal of 70,000 sq ft on rent in Indiabulls Financial Centre in Elphinstone for about Rs 120 per sq ft, excluding maintenance charges.
Tax consultancy firm KPMG has taken about 1.5 lakh sq ft in Indiabulls Financial Centre for Rs 120 per sq ft, excluding maintenance charges. An American FMCG firm has also leased nearly 35,000 sq ft space in Indiabulls Financial Centre.
The most recent major office space deal was also concluded in Lower Parel.
Property consultants say these deals in the past few months are an indicator that office rentals are firming up, especially in the Lower Parel-Dadar belt. While rentals in Powai and Worli have declined by 20%-25%owing to oversupply and landlords reducing rentals to lure tenants, they have and in the Andheri-Goregaon belt, rentals have fallen by nearly 25% and a maximum 70% in a few buildings in the Andheri-Goregaon belt.
“With no new commercial buildings being built, rentals are firming up, especially in the Lower Parel-Dadar belt, having a total available commercial space supply of 9 million sq ft. In the last few months, builders and landlords have reduced rentals to lure tenants, thus increasing absorption of space in this area,” said the MD of a global property consultant.
Sanjay Rohida of Aryans Properties said, that the recent lease transaction rates are an indication that rentals are stabilizing and easy accessibility has been given preference. “The fallen rentals are big incentive for relocation and expansion plans for firms as owners realize that it is better to lease the premises than keep it vacant and spend on maintenance,”he said.
A recent office space report by global property consultant Cushman and Wakefield said that about 2.4 million sq ft of office space was absorbed in Mumbai in the first half (Jan-June), the highest across India. But the number was still 10% less compared to the first half of 2012. The city witnessed a net absorption of 1.62 million sq ft, an increase of 16% from the same quarter last year and twice the previous quarter. Supply during the first half of 2013 saw a decline of 7% compared to the same period last year.