MUMBAI: Swiss bank UBS has entered into an agreement to pick up 4 lakh sq ft of office space on lease at realty developer K Raheja Corp’s IT Special Economic Zone Gigaplex at Airoli in Navi Mumbai in one of the largest occupier lease transactions, three persons familiar with the development said. The Zurich-headquartered, NYSE-listed multinational bank is planning to utilise the space to develop its global service center hub here. This will be the first instance of an international bank setting up its service center in Navi Mumbai. Currently, three large domestic banks including State Bank of India and Axis Bank already have their back office units in Mumbai’s satellite city.
“The deal has been signed and the registration was concluded recently. The bank has also started the fit-out work here and is aiming to start operations from this center from the beginning of the next year,” said one of the persons mentioned above. In the first leg of the transaction, the bank’s India arm has picked up 1.50 lakh sq ft office space and it will be operational from January. Rest of the space will be picked up in phases over the next 12-18 months as part of the bank’s growth plan.
Total tenure of the lease is 10 years and the bank will be paying more than Rs 52 per sq ft in monthly rental for the space, clocking an annual rental payout to Rs 10 crore. As per the agreement, lease rentals will be revised upward by 15% every three years.
An email query to UBS and K Raheja Corp remained unanswered until the time of going to press. Transaction advisor JLL India declined to comment for the story. Global strategy and consultancy major Accenture occupied 3 lakh sq ft office space in the same IT park a quarter ago. Accenture had entered this micro market with 50,000 sq ft office in 2010-11 and it has over 1.5 million sq ft of office space here. Navi Mumbai and its peripheral areas are emerging as a destination for IT and ITeS companies looking for office space to expand or consolidate operations.
Competitive real estate costs, an upcoming international airport and improved connectivity to Mumbai are all advantages of being in Navi Mumbai. While monthly rent for grade A office space in Navi Mumbai stand at Rs 50-55 per sq ft, in established locations of Pune and Bengaluru it would cost Rs 65-75, respectively.
In Gurgaon the rate has touched Rs 85 per sq ft. Currently, Navi Mumbai has over 15 million sq ft of IT parks already developed and occupied by large Indian and multinational companies. The rentals here are expected to remain stable in the range of around Rs 50 per sq ft given that nearly 9 million sq ft is set to be added to the existing supply over the next two years. K Raheja Corp, the country’s second largest developer of business parks, itself is working on plans to build another 5 million sq ft here and plans to invest Rs 2,000 crore including land cost.
At Gigaplex in Airoli, a total 7 million sq ft IT park spread over 50 acres, around 1.5 million sq ft is ready and occupied,
Credits ET Realty