In the country’s commercial capital, Mumbai, over a dozen large developers and double their number of smaller ones are selling office properties as well, according to Ashok Kumar, Principal and Managing Director of Cresa Partners, a corporate realty services firm.
Mumbai has a grade-A office stock of around 67 million square feet, with a vacancy of approximately 13 million square feet, according to property consultant Jones Lang LaSalle (JLL). The office vacancy rate has increased to 19 per cent, making it 14 consecutive quarters of increased vacancy.
DLF, the country’s largest property developer, is in the final stage of selling its IT Special Economic Zones in Pune and Noida to global private equity player Blackstone and a high net worth investor, respectively for Rs 1,300 crore, respectively. Ackruti City and The 3C company are the other investors in these projects.
Ackruti City, the Mumbai-based property developer, is selling offices in three of its properties—Ackruti Star, Ackruti Viva and Ackruti Solaris —in the Andheri suburb of Mumbai. Wadhwa Group, one of the largest unlisted realty companies in Mumbai, is also selling floors in its soon-to-be finished ‘The Capital’ project in the Bandra Kurla Complex. As a matter of fact, it is in talks with large corporates to sell individual floors.
But does it imply distress among the realtors as ROI (Return on Investment) gets affected. Sanjey Roy, DLF spokesperson says, “As far as returns on investment is concerned, that depends on the business model of the developer as even among the commercial properties, there can be either sale model or lease model. DLF has an extremely successful lease model and is the largest office space provider in the country. Both these models have their own business strategy. For instance, the lease model that is mostly applicable in the office space is also dependent on the growth of international economy,” he says.
…..to be continued
