The BKC commands Rs 28,000-29,000 per sq ft for office property and monthly rents are Rs 250-300 per sq ft
Pharmaceuticals major Abbott’s purchase of 435,000 sq ft office space for Rs 1,480 crore in Mumbai’s Bandra Kurla Complex (BKC) from Godrej Properties has set a precedent in the area.
But, the purchase price of Rs 34,000 per sq ft will not push up commercial property prices in the BKC, home to Citibank, JPMorgan, the Securities and Exchange Board of India and a host of financial institutions and government agencies.
The BKC commands Rs 28,000-29,000 per sq ft for office property and monthly rents are Rs 250-300 per sq ft. The highest price paid before this for office space here was by Citigroup in 2012. It paid Rs 33,164 per sq ft, or Rs 985 crore for 297,000 sq ft in the First International Financial Centre Tower. In 2008, Standard Chartered bought 220,000 sq ft in the BKC from Parinee Developers for Rs 720 crore, at Rs 32,000 per sq ft.
“It (the Abbott deal) will not increase prices in the BKC. There is not much space left,” said Raja Seetharaman, co-founder, Propstack, a start-up that offers information on commercial real estate.
Ashok Kumar, managing director of property consultant Cresa Partners, said, “Abbott paid 10-15 per cent higher than the market price. But, since it will house its headquarters, it did not bargain.”
“Abbott’s deal is not a benchmark. Buyers are negotiating for lower rates,” Kumar added.
“Prices will go up by 10-15 per cent, as there is not much supply in the market,” said Ashish Shah, chief operating officer at Radius Developers.
Pirojsha Godrej, managing director and chief executive officer of Godrej Properties, said Abbott had paid a higher price for a product better than what was available in the market.