Morgan Stanley Advantage Services recently took up a 37,000 sq ft of office space at Nirlon Knowledge Park, in suburban Mumbai, or a five-year period. The starting monthly rental payout is around INR 49 lakh, with rent escalation of 15% every three years, according to documents accessed by CRE Matrix, a real estate data analytics firm.
Nirlon Knowledge Park is located In Goregaon (East) and houses a number of multi-national and Indian corporates.
“A MNC client leaseing out a space in Grade A+ commercial property at handsome pre-Covid19 rental values clearly indicates demand for Grade A+ properties over other properties. We foresee rental values to remain under pressure in year 2022 across Grade B and C assets. Grade A tenants will be spoilt with wide choice within commercial office space. However, demand will chase Grade A+ Assets ensuring vacancies stay low and rentals firm up,” Said Abhishek Kiran Gupta, Co-Founder And CEO, CRE Matrix.
As part of the lease transaction, there is a 14-month lock-in period and a renewal option for another five years, taking it to a total of 10 years.
Office space absorption across the six major cities stood at 36.9 million sq ft in 2021, up 15.5% from last year. New supply of office space rose 28% year-on-year to 36.8 million sq ft, as per data released by real estate advisory Savills India.
Bengaluru has led the leasing momentum, recording 12 million sq ft. of absorption for the year, followed by National Capital Region (NCR), which witnessed 7.8 million sq ft of office absorption. Hyderabad saw 5.7 million sq ft of leasing, while office space absorption in Mumbai was at 4.6 million sq ft.
However, the overall vacancy levels on a pan-India scale have risen by 6%, as a result of supply infusion, to 17.7% in 2021.
“Although the second wave of the pandemic had slowed down the activity in parts of 2021, a strong rebound in the second half of the year has shown the inherent force of pent-up demand indicating comparatively better performance. The leasing and supply activity numbers across top cities in the country convey the depth of growth opportunity and Indian office market’s long-term potential,” Said Anurag Mathur, CEO, Savills India.