Economic Times: November, 2016
Mumbai: In the largest-ever transaction in Nariman Point's history, Singapore's multinational bank DBS Bank is set to pick up 1 lakh sq ft of prime office space spread over total five floors in Blackstone Group's commercial property, Express Towers, said two persons familiar with the development. “The deal is expected to be signed any time in the next two weeks. As part of the deal, the bank will get ground floor for its corporate branch, while four more floors will be used for its headquarters,“ said one of the persons mentioned above.
The bank is shifting its India headquarters, currently housed in south Mumbai's Fort House, and corporate branch to this new office space in the skyscraper. The banking and financial corporation will be paying a monthly rental of `250 per sq ft, taking the total annual payout to `30 crore.The bank is expected to start its operations from the new office early next year.
The total lease tenure is nine years, with a clause for rental reset, with 15% appreciation every three years.
Last year, Indian Hotels Company had leased around 30,000 sq ft spread over two floors in Express Towers and this was touted to be the largest so far. In 2015, law firm Shardul Amarchand Mangaldas & Co had also picked up 26,000 sq ft on lease in this landmark office building. Both Blackstone and DBS Bank declined to comment on the story. “As a matter of policy, Blackstone does not comment on mediamarket speculations,“ the private equity major said in an email response. Transaction advisor CBRE also refused to comment.
Blackstone, global private equity major and most active investor in India's real estate sector, along with its partners is planning to list two separate Real Estate Investment Trusts (REITs) and has been lapping up commercial properties across the country . It acquired a majority stake in Express Towers for about `870 crore in 2014, and since then, has been retrofitting the iconic office tower built in 1972 for better market viability .
With the emergence of newer business districts such as Bandra-Kurla Complex, Lower Parel and Andheri-Malad belt in central and suburban Mumbai, the Central Business District had been witnessing an exodus of corporates for several years now. Better amenities, connectivity, large floor plates, parking and many such factors had prompted the shift from Nariman Point. However, many believe, the proposed and currently underway projects like the coastal road, eastern freeway, and metro rail phase III may help the location reclaim its glory.