MUMBAI: The world’s largest generic pharmaceutical company, Teva Pharmaceutical Industries, has inked a deal for 1.25 lakh sq ft office space for lease in Oberoi Realty’s commercial complex Commerz II in Goregaon suburb of Mumbai in the largest transaction for headquarters by any company, said three persons familiar with the development.
“The transaction was concluded recently and the company will start operating from the new premise in the next two three months. The design and fit-out work will commence soon,” said one of the persons mentioned above. The Israeli multinational pharmaceutical company will be shifting its India headquarters and consolidating six offices in Mumbai in this newly leased space, spread over four floors. The New York Stock Exchange-listed firm’s current India headquarter operations are split into two-three office buildings in the Powai suburb of Mumbai.
The drug-maker will be paying Rs 140-145 per sq ft per month for the space. Teva has leased the front-office space for five years and rentals will be escalated after three years. Teva will be paying close to Rs 22 crore as rentals every year for the next three years. Rent will be reset for the next two years after that. The transaction assumes significance as the space is being picked up for the company’s headquarters and that too in Goregaon, not in any of the metro’s business districts.
“We are delighted that Teva Pharmaceuticals has chosen Commerz II, our commercial building and part of Oberoi Garden City, for their India headquarters. Convenient location off the Western Express Highway and the proposed metro for easy connectivity between north-south corridor of Mumbai has aided the response to Commerz II,” said Vikas Oberoi, CMD, Oberoi Realty, confirming the transaction. Email queries to Teva remained unanswered until the time of going to press. Transaction advisor JLL India declined to offer a comment for the story.
The transaction shows that the commercial property market in the country’s commercial capital continues to be robust. Low vacancy levels across office complexes and lack of new commercial space being ready to move are contributing to the rents firming up. Vacancy levels in other commercial complexes in the vicinity along Western Express Highway including Nirlon Knowledge Park and Nesco are currently close to zero.
Since 2015, office space absorption across major Indian property markets has been growing on the back of a combination of lower rents and a positive economic outlook, which makes it certain that the recovery, this time, is more sustainable and long-term in comparison with 2011.
Credits ET Realty