IDBI Federal Life acquires commercial space worth Rs. 111 crore in Lower Parel

In an out-and-out real estate deal, which is the largest so far this year, IDBI Federal Life Insurance Company has bought office space worth over Rs 111 crore at Marathon Futurex complex at Lower Parel in Mumbai, according to sources familiar with the development.

Marathon Realty is developing this eight lakh sq ft office building in three phases, of which two phases up to 26 floors have already been completed. IDBI Federal Life has acquired around 62,000 sq ft space spread over two floors -22nd and 23rd floors -of the 26-storey tower.

The deal works out to approximately Rs 18,000 per sq ft which is within the range of current property rates for outright transactions. Office property rates in Mumbai’s secondary business district of Lower Parel are in the range of Rs 18,000-20,000 per sq ft basis the profile and facilities offered in commercial complexes in the locality.

“The deal is complete and registered last week. This office space can accommodate a total of 450 employees,” said a source.  “We have acquired the property in line with its growth strategy and plan to start operating from the new office in a few months.”

The complex, with multi-level car park, also houses offices of Tata Group’s consulting firm Tata Strategic Management, HDFC, India subsidiary of Paris-based global cosmetics major L’Oreal, and the Consulate General of Israel. The commercial project has already completed two phases of planned development; and the third phase is expected to finish in the next two years, which will take the tower to 38th floor, making it one of the tallest commercial towers in India.

Mumbai real estate

A report by brokerage house JM Financial at the back of a bi-annual property expo Of MCHI, highlights that even innovative discounts will not help boost residential property sale in Mumbai this year as the prices are much higher & beyond the reach of end buyers.

The firm says the subvention schemes, stamp duty/floor rise/maintenance bill waivers or freebies like iPhone or holiday trips offered by developers form only 1-5 percent of the property value, which is insignificant in altering purchase behaviour. The report notes that discounts available on execution of deal (10 – 15 percent) remain a preferred way of giving discounts than a cut in declared property rate.

The MCHI property exhibition had 150+ developers participating in it, covering more than 300 projects. Based on the visit to developers in the exhibition, the report notes that the pricing had been maintained. The Mumbai Metropolitan Region (MMR) witnessed a marginal (1 percent) decline in pricing over last year. A Few areas like Kalyan, Virar, and Dahisar saw material price correction while no change was seen in other regions.

Furthermore, the inventory is mounting in Mumbai. The unsold houses are at a 50 month high.