Abbott India Ltd. has bought 500,000 sq. ft. commercial space at Mumbai in Rs 1,400 crore
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Recently, Abbott India Ltd. has closed a deal of Rs 1,400 crore in Mumbai, where Abbott has bought 500,000 sq. ft. commercial space and it is one of the largest commercial real estate deal in present time, as per the real estate experts who are familiar with the real estate transaction. This deal is clear example that demand for commercial space in Mumbai is increasing and its IT companies, Pharma firms and Start-ups which are looking for commercial space.
Abbott India Ltd. which is one of the fastest growing pharmaceutical firm has brought the space for office at Godrej BKC in Mumbai’s BKC (Bandra Kurla Complex). The real estate market in Mumbai has seen a positive shift in last two years and when it comes to commercial property, so we can say that it has seen a pick-up over past year because demand for commercial space and office space from IT, pharmaceutical firms, multinational and start-ups has risen. However; it is well known fact in present the level of unsold inventories for residential market is risen for major markets in Mumbai and deal of Abbott has clearly reflects that there is little pick-up in commercial properties. According to real estate experts it was phenomenal deal because it was a single-cheque transaction and its well-known fact that Pharmaceutical companies never prefer to spend this much money on property or real estate, especially at BKC where commercial property is expensive and where Banks and financial organizations prefer to set-up their headquarters, as per unknown sources who declined to be identified because it was not a public deal.
However; according to another person, the deal had been clinched in the month of Sep 2015, and till now it was subject to approvals, whereas; Cushman & Wakefield, a global real estate consultancy was advisor to the deal, but Cushman & Wakefield has declined to comment on the deal. Apart from that an Abbott spokesperson also stated that we don’t have any comment to share on this matter. Godrej BKC is about to come up with 19-storey commercial project in same region and it will be developed by Jet Airways (India) Ltd. and Godrej Properties Ltd (GPL). However; previously in 2011 Godrej Properties had acquired the construction and development rights from Jet Airways to build the property. And the spokesperson from Godrej Properties stated that he don’t want to comment on the matter. In past two to five years, BKC has emerged as one of the most prime commercial hubs in Mumbai and due to that the average price for commercial property at BKC region ranges between Rs.20,000 and Rs.34,000 per sq.ft., however; the rental rates go up to the Rs.270 per sq.ft. per month as per the estimation of JLL India which is property consulting firm. According to the Ashutosh Limaye. who is research head at JLL India, “Now Multinational firms are looking for long term business in India and because of that they are increasingly choosing BKC to set up their head offices”.
According to real estate experts this is great time to sign up the real estate deals in Mumbai because property prices and rent will rise soon because of huge demand of commercial and residential space. In present, Abbott deal is one of the largest commercial real estate transactions in India. However; in 2012, Cipla Ltd which is another fastest growing pharmaceutical firm in India has brought 1.30 lakh sq.ft. at Peninsula Business Park in Lower Parel for about Rs.985 crore. From last one year the demand for commercial spaces in Mumbai is growing. As per the latest reports of property advisory CBRE, the uptake for commercial space has rose by 70 per cent in the second quarter of 2015 in comparison of previous quarter, which was led by BFSI (Banking, financial and insurance services) sector.
