Essel Group acquires Rs 400 crore worth property in Mumbai
The transaction assumes significance as it signals a dramatic recovery for Mumbai's commercial property market after three years of sluggish growth
Dec 04, 2014
Source : The Economic Times


MUMBAI: The city's second-biggest ever office purchase marks stunning recovery from lows for its beleaguered commercial property market and may portend a period of rapid growth amidst rising demand and shrinking inventory.

In one of the largest front-office transaction, Essel Group, widely known for its media and entertainment business Zee Entertainment Enterprises, has acquired 2.20 lakh square feet commercial space in Marathon Futurex complex at Lower Parel in Mumbai for overRs 400 crore, said two persons familiar with the development.

The group will be shifting headquarters from Worli to this new office spread over top seven floors of Marathon Realty's tower II. "Essel Group has identified certain premises in Marathon Futurex at Lower Parel. This is still under process," said Mukund Galgali, Executive Vice-President, Essel Group, in response to ET's email query.

The transaction assumes significance as it signals a dramatic recovery for Mumbai's commercial property market after three years of sluggish growth. A dull show in the first two quarters of the year was more than offset by a sale plus lease of 1.8 million sq ft in the third quarter alone. This is half of total nine month sales plus lease of 3.6 million sq feet concluded in Mumbai.

Both capital values and lease rentals for office spaces have been weakening across the country for over three years now. But optimism about the new government's economic programme has prompted buyers to take advantage of the weakness in the commercial property market. Purchases on outright basis and long leases have climbed in recent months as prices continue to be competitive and easing of inventory levels for commercial spaces, said property consultants.

The Zee deal is also a major vote of confidence for Lower Parel, Worli and Prabhadevi localities which have emerged as competitors to BKC as a business district despite transport bottlenecks and flooding problem during the monsoons.

This is the second largest outright commercial space transaction based on both area and value terms after Citigroup's purchase of 2.97 lakh sq ft in Bandra-Kurla Complex more than two years ago. Most office transactions including the Goldman Sachs and Flipkart's deals in Bangalore, have since been concluded on a lease basis.

"The deal was signed and concluded recently. Fit outs and interiors work has also been commissioned and Essel Group is expected to shift its headquarter by the end of next quarter," said one of the persons mentioned above.

An email to Marathon Realty did not elicit any response. Transaction advisor JLL India declined to comment. Currently, these three areas (Lower Parel, Worli, Prabhadevi) have office space stock of 11 million sq ft. Of this around 1 million sq ft is available now as inventory against 4million sq ft three years ago.

"Commercial market has shrugged off the sluggishness witnessed since last three years. Enquiries have gone up and deals are taking place smoothly particularly after June since when the new stable government was formed," said Rajiv Jain, a broker operating in south and central Mumbai.

Latest Realty News

Government should allot 2.5 FSI to prevent unauthorized constructions in PCMC limits: MLA Laxman Jag...
Dec 04, 2014
PUNE: Newly elected MLA from Chinchwad constituency, Laxman Jagtap has urged the state government to allot 2.5 FSI in Pimpri Chinchwad municipal limits to prevent the growth of unauthorized constructions
Housing boom thrives on EWS plots
Dec 04, 2014
GURGAON: Behind the steel and glass buildings that dominate the Cyber City skyline lies a cluster of plots in DLF Phase 3 that were originally meant for houses for economically weaker sections
HC notice to govt for multiple plot allotments
Dec 04, 2014
CHANDIGARH: Punjab and Haryana high court issued notice to the state government to file its reply regarding multiple plot allotments
Centre to reply on DLF project
Dec 04, 2014
NEW DELHI: Under what circumstances was change of land use permitted to a dairy farm for residential purposes to benefit a project by realty giant DLF
Realty rule boost to realtors
Dec 04, 2014
Patna: The resurgence of the realty sector after almost two years of lull looks imminent with the cabinet's approval to the Bihar Building Byelaws 2014
Sahara Group likely to sell Rs 1,200 crore land to realty company M3M India Ltd
Dec 04, 2014
NEW DELHI: Sahara group is believed to be selling a large land parcel for over Rs 1,200 crore in the outskirts of the national capital to Gurgaon-based realty firm M3M India Ltd
ED attaches Rs 158 Cr. Seashore property
Dec 04, 2014
BHUBANESWAR: A week after attaching Rose Valley Group's Rs 295 crore bank balance, the Enforcement Directorate (ED) attached Seashore Group's assets worth over Rs 158 crore
Realty firms gain as govt eases FDI norms for construction
Dec 04, 2014
Mumbai: Realty companies have gained between 1% to 3% on BSE boosted by government's decision to ease FDI norms in construction sector
DLF plans to sell 50% in Cyber City to raise over Rs 3500 crore
Dec 04, 2014
Mumbai: Real estate major, DLF has initiated a process to sell 50% of its subsidiary, DLF Cyber City Developers (DCCD) to raise over Rs 3,500 crores
Takers for DDA flats despite 5-year rule
Dec 04, 2014
NEW DELHI: Despite DDA's best efforts to keep speculators out of their latest housing scheme, successful applicants are receiving offers for their flats based on a General-Power-of-Attorney (GPA) transfer of rights

Latest Realty News Of State

Realty Talk's