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Indian Real Estate News : Mumbai
HDFC Bank likely to buy office space in Lower Parel for Rs 220 crore
Source: ET Bureau Jan 04, 2013
In one of the largest outright office space deals, HDFC Bank is close to buying nearly 1.3 lakh sq ft of commercial space spread over four floors in Peninsula Business Park at Lower Parel in central Mumbai, according to persons who are involved with the transaction.

The bank is paying around Rs 17,000 per sq ft totaling nearly Rs 220 crore for acquiring the office space in Peninsula Business Park's 20-storey tower-B owned by Alok Realtors, the real estate arm of Alok Industries.

Emails sent by ET to both HDFC Bank and Alok Industries BSE 2.98 % went unanswered. HDFC Bank is expected to pay the nearly Rs 220 crore in two installments. The bank will use the office space to expand its operations and will also shift some of its current operations from other offices, said one of the persons.

Along with the commercial space that can accommodate over 1,500 employees, it will also get parking slots for nearly 150 cars under this deal. The deal is part of Alok Industries' larger plan to exit the real estate business. The company, through its realty arm Alok Realtors, had acquired this commercial building, part of the complex Peninsula Business Park, from developer Peninsula Land for Rs 1,075 crore in 2007.

Those days, it was counted among the most expensive deals right in the middle of the property boom. The real estate market, however, has been on the decline since then, with an intermediate recovery that lasted only for 10 months in 2009-10. The group has already announced its decision to exit the realty business completely.

Eighty percent of the building's total space of 641,000 sq ft is marked out for use by information technology and IT-enabled services, while the rest is meant for commercial use. HDFC Bank is buying the space marked for IT/ITeS operations.

Central Mumbai, including Lower Parel, Worli, Dadar, and Prabhadevi with total available commercial space supply of nearly 9 million sq ft, has seen some key deals happening in the last three quarters. And vacancy level that was around 24% here a few months ago, is expected to fall owing to these large deals, said a property consultant.

The last major office space deal in Mumbai was also concluded in Lower Parel. Pharmaceutical major Cipla bought office space in Peninsula Business Park in a deal worth over Rs 270 crore to shift its existing 70-year-old headquarter at Bellasis Road in south Mumbai. On Monday, shares of Alok Industries closed at Rs 11.41 on the Bombay Stock Exchange, down 0.6% from Wednesday's close. Shares of HDFC Bank closed at Rs 682, down 0.7% over its previous close.

Tag: india real estate, real estate markets, indian real estate, realty trends, real estate in Mumbai, HDFC Bank
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