Pharmaceutical firm Abbott India Ltd on Wednesday bought 435,000 sq. ft at Godrej BKC in Mumbai’s Bandra-Kurla Complex for $228 million (Rs.1,479 crore) from its developer Godrej Properties Ltd to set up a corporate office.
Godrej Properties informed BSE that it has closed India’s largest commercial real estate deal with a single user forRs.1,479 crore, but did not reveal the name of the buyer.
In a separate statement, Abbott India on Wednesday said it plans to invest in a new Mumbai corporate office at the Godrej BKC building as part of its plan to consolidate existing offices and bring operations in the city into a single location.
Mint reported on 17 September that Abbott has closed a Rs.1,400-crore deal to buy office space at Godrej BKC, in one of the largest commercial real estate deals in recent times.
Global real estate consultancy Cushman and Wakefield was the advisor to the deal.
Godrej BKC has over 1.3 million square feet of saleable area and is being developed by Godrej Properties in partnership with India’s largest airline by passengers carried Jet Airways (India) Ltd. The project is expected to be ready for occupancy by mid-2016.
“We are very happy to have successfully concluded this large and strategically important deal at our project Godrej BKC,” said Pirojsha Godrej, managing director and chief executive officer, Godrej Properties.
He said the deal will help unlock capital invested in the commercial portfolio and speed up the company’s growth.
Godrej Properties is currently developing residential, commercial and township projects spread across 10.25 million square metre (110.30 million square feet) in 12 cities.
Referring to the deal, Abbot India said the office space at the Godrej BKC, likely to be occupied by early 2016, will house more than 1,500 employees.
“India is one of the most important places in the world for Abbott, and we’re investing here accordingly,” said Abbott chairman and chief executive officer Miles D. White. “We intend to be a strong, committed, and contributing part of India’s future.”
The company said it also intends to expand manufacturing capacity and research and development (R&D) capability, employee development and community programmes in India.
Abbott India employs around 14,000 people and has sales of over $1 billion in India. It has invested in three manufacturing facilities (Goa and Baddi for pharmaceuticals, and Jhagadia for nutrition) and two R&D facilities (Mumbai for pharmaceuticals and Bangalore for nutrition).
In the last one year, the commercial property market has seen a pick-up in demand for office space from multinational, information technology (IT) and pharmaceutical firms and start-ups.
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 andRs.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.
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.