Mumbai: Consumer durables firm Samsung India Electronics Ltd has signed a deal to take up around 1 lakh sqft of office space on lease to set up its new corporate office at Oberoi Realty Ltd’s commercial property Commerz II in Goregaon suburb of Mumbai, three people aware of the development said.
The Korean company will pay Rs.135 per sqft as monthly rental with an advance payment for six months, said the first person mentioned above, adding that the deal has been signed for the next five years.
Earlier in 2016, Samsung signed a deal to lease 3.5 lakh sq ft of space at Two Horizon Center, a premium office building developed by DLF Ltd at Gurugram in the National Capital Region. DLF rented the space that Samsung currently uses as its Indian headquarters for Rs.140 per sq ft per month, in one of the largest recent commercial property lease deals.
The deal at Commerz II has been closed in December, said the second person, adding that Samsung might be moving into the new space by the next quarter. Samsung India Electronics and Oberoi Realty did not respond to emailed queries seeking confirmation of the deal.
According to property advisers and consultants, good quality office buildings in the western suburbs of Mumbai are increasingly attracting big multinational companies.
In September 2016, the world’s largest generic pharmaceuticals company, Teva Pharmaceutical Industries, closed a deal for around 2.5 lakh sqft of space in the same building (Commerz II) to set up its India headquarters. This was one of the largest commercial leasing deals that closed December 2016 in the vicinity of in the vicinity of other information technology companies like Tata Consultancy Services (TCS).
Other multinational companies like Halliburton Co., an oil field equipment supplier firm, and Draeger India Pvt Ltd also took up space at Commerz II, a 30 storey tower.
This is the second commercial building developed by Oberoi Realty at Goregaon. As per information available on the company’s website, over 27% of the building had been leased out until the second quarter of this financial year. The first Commerz building, which is part of a mixed used development in the area, has been fully leased out.
“Due to affordability and availability of grade A office space, western suburbs continued to garner significant occupier interest in 2016. About 45% of the total deal volume was concentrated in this area,” said Surabhi Arora, senior associate director at Colliers International, a property advisory firm.
The commercial property market has seen a pick-up in the past year as demand for office space from multinational, information technology (IT), pharmaceutical firms and start-ups has risen. Steady lease rentals, high absorption levels, inadequate supply and global investor interest have boosted India’s commercial real estate sector, even as the country’s residential property market remains in a slump.