Abbott India buys office space in Mumbai for $211m

Visual from company website. September 2015

Pharmaceutical firm Abbott India Ltd has closed a Rs.1,400 crore ($211 million) deal to buy office space in Mumbai, in one of the largest commercial real estate deals in recent times, said two persons familiar with the transaction.

Abbott has bought 500,000 sq. ft. in office space at Godrej BKC in Mumbai’s Bandra Kurla Complex (BKC), they said.

The commercial property market has seen a pick-up over the past year, as demand for office space from multinational, information technology (IT) and pharmaceutical firms and start-ups has risen.

The revival in the commercial property market is in contrast to the residential market where unsold inventories have risen in major markets.

The Abbott deal reflects this pick up in commercial property.

“It is a phenomenal deal, a single-cheque transaction. Pharmaceutical companies don’t spend that kind of money, especially at BKC, which is expensive and where normally banks go and set up their headquarters,” said one of the two persons quoted above.

He declined to be identified because the deal has not been made public.

The second person quoted above said the deal had been clinched last month and is subject to approvals. The global real estate consultancy, Cushman & Wakefield was the advisor to the deal.

Cushman & Wakefield has declined to comment on the deal.

“We don’t have any comment to share on this matter,” said an Abbott spokesperson.

Godrej BKC is an upcoming 19-storey commercial project, jointly developed by Godrej Properties Ltd (GPL) and Jet Airways (India) Ltd.

In 2011, Godrej Properties had acquired the development rights from Jet Airways to build the property.

A Godrej Properties spokesperson said the firm does not want to comment.

In the last few years, BKC has emerged as one of the prime commercial hubs in Mumbai. The average price of commercial property in BKC ranges between Rs.20,000 and Rs.34,000 per sq.ft. while the rental rates go up to Rs.270 per sq.ft. per month, estimates from property consulting firm JLL India show.

“Multinational firms, which are looking for long-term business in India are increasingly choosing BKC to set up their head offices. This is a good time to sign up deals as property prices and rent will rise soon because of increasing demand for commercial space there,” said Ashutosh Limaye, research head, JLL India.

The Abbott deal is among the largest commercial real estate transactions in India.

In 2012, another pharmaceutical firm, Cipla Ltd, had bought 1.30 lakh sq.ft. at Peninsula Business Park in Lower Parel for about Rs.985 crore.

Demand for commercial real estate has seen significant growth over the last one year.

According to a report by property advisory CBRE, the uptake of commercial office space rose by 70% in the second quarter of 2015 over the previous quarter, led by banking, financial and insurance services (BFSI) sector.

This article was first published on Livemint.com

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Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.