Oberoi Realty is actively fielding inquiries from a variety of sectors, including flex space companies, pharmaceuticals, technology firms, and educational institutions, among others, as it looks to secure tenants for its Grade A commercial development, Commerz III, located within Oberoi Garden City in Goregaon, Mumbai. The project, encompassing a total of 4 million sq ft chargeable space, is set to be completed by March 2024. A significant portion of the space, totaling 1.6 million sq ft, has already been leased to the global investment bank, Morgan Stanley. The company now anticipates closing deals for the remaining 2.4 million sq ft of space within the next two to three months.
Pankaj Gupta, CEO of Commercial Real Estate at Oberoi Realty Ltd, stated, “We are in active discussions with clients who are keen to secure commercial space as the construction nears completion, which is approximately five to six months away. We are hopeful that the closure for the remaining 2.4 million sq ft may be achieved in another two to three months.”
Gupta further mentioned the substantial inventory that is becoming available and the company’s intention to offer the building for fit-outs as it nears completion by March. Oberoi Realty has been receiving inquiries from a diverse range of clients, including flex space providers, pharmaceutical companies, technology firms, and educational institutions.
The total footprint of this 51-storey development includes 4 million sq ft chargeable space, of which 1.6 million sq ft has already been leased to Morgan Stanley. Commerz I and II account for an additional one million sq ft, making it a five million sq ft portfolio. Gupta noted that the higher floors have already been secured by Morgan Stanley, and leasing efforts are focused on the lower floors.
Market sources have indicated that rents for the space vary from Rs 160 to Rs 170 per sq ft. Most companies seeking Grade A office space are those that have been operating from older buildings, typically 10-12 years old. These companies face challenges in terms of access, compliance, and floor space, which has led them to consider transitioning to a Grade A office space like Commerz III.
Gupta highlighted that the company offers multiple floor plate options, ranging from 30,000 sq ft to 90,000 sq ft, catering to the needs of clients looking to consolidate their offices. This trend is not limited to international firms but also includes domestic companies such as Indian banks, research institutions, and manufacturing firms.
Aside from consolidation, companies are also seeking modern Grade A office space for expansion, driven by the need for more space and the desire to hire additional staff. Commerz III offers floor plates of various sizes, including 90,000 sq ft, 70,000 sq ft, 30,000 sq ft, and 40,000 sq ft on the top and mid-level floors.
Commerz III comprises seven zones and boasts 54 lifts, with clients securing larger floor plates having dedicated lift zones. Additionally, the building offers four floors of parking, three in the basement and one at ground level.
With the completion of Commerz III, Oberoi Realty is introducing a significant retail area spanning 25,000 to 30,000 sq ft, featuring amenities such as food courts, restaurants, and a gymnasium, catering to the office crowd. Construction work on this aspect has already commenced.
Regarding Grade A office supply, Gupta noted limited new supply in this segment, with expectations of future developments in areas such as Worli, Bandra Kurla Complex, and the western suburbs like Goregaon.
Oberoi Realty has three commercial buildings within its international Business Park, including Commerz 1, which is part of the hotel development and has 17 floors of offices, and Commerz 2 with 30 floors, both of which have already been leased out.
When asked about plans for other commercial land parcels in the city, Gupta mentioned that the company is witnessing a significant interest in Grade A commercial assets. While they have substantial land holdings, they will evaluate opportunities as they arise. Currently, the focus is on projects in Mumbai, with the possibility of expanding to Delhi if suitable opportunities emerge.
Regarding Real Estate Investment Trusts (REITs), Gupta stated that it is still early days for Oberoi Realty to discuss such ventures, as they have yet to reach the necessary critical mass.
Gupta also addressed retrofitting older buildings, noting that Oberoi Realty prefers to focus on greenfield projects where they can control the design and construction process. The company is actively pursuing sustainability initiatives, including reduced reliance on packaged water, waste management, and LEED Platinum certification, in line with the ESG targets of its clients.
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