Design school Future Technology Skills Foundation (FTSF) has picked up nearly 200,000 sq ft office space spread over eight floors at Brookfield Properties’ Equinox Business Parks near Mumbai’s business district Bandra-Kurla Complex (BKC) on a long-term lease, said persons with direct knowledge of the development.
Total tenure of the deal is 32 years, making it the country’s largest-tenure lease transaction ever. FTSF will be paying Rs 150 per sq ft as rental to occupy ground plus seven floors of the commercial building.
The lease agreement has a rental escalation clause, which ensures 15% rental reset every three years. As per the terms of the deal, the initial lock-in period for the lease is 10 years and the rentals will be waived off for the first six months period to be utilised for fit-outs.
“The agreement for the lease deal was concluded a few days ago and the fit-out work will commence soon,” said one of the persons mentioned above.
With only four towers spread over 10 acres, Equinox Business Parks has one of the lowest density business parks in and around the BKC business district, ensuring ample space for safe social distancing, one of the key factors driving the occupiers’ decision making with regards to lease transactions.
Brookfield Asset Management declined comment for the story. FTSF executives could not be reached for a comment.
With this deal, the Business Park’s occupancy level has reached nearly 100% as against 40% when Brookfield Asset Management acquired the property. It had bought Equinox Business Parks with 1.25 million sq ft of leasable area in 2018 for Rs 2,450 crore from its erstwhile owner and developer Essar Group.
The real estate arm of Brookfield Asset Management had leased 350,000 sq ft of office space at Equinox Business Parks to five clients in one of the large leasing transactions in the country’s commercial parks segment after the pandemic broke out last year.
Brookfield Properties had then leased the space to Boston-headquartered State Street Corporation, US conglomerate Hasbro, American-Canadian digital media and broadcasting company Vice Media, Temasek Holdings’ portfolio company STTelemedia, and existing customer Tata Communications.
Office space demand across India has remained resilient across the country’s top seven markets during the quarter ended June despite serious disruption by the second Covid wave. The information technology and IT-enabled services companies that have remained unscathed from the pandemic impact have been a key driver for office space leasing.
With the advent of a strong vaccination drive across the country and India’s office market being fundamentally driven by a booming IT sector, experts are of the view that the market will be able to come back on the earlier rapid growth track soon.