By innovative | 10 Aug, 2021
According to people familiar with the development, the design school Future Technology Skills Foundation (FTSF) has signed a long-term lease for closely 200,000 square feet of Equinox Business Parks, owned by Brookfield Properties, has eight stories of office space near Mumbai's business district BKC/Bandra-Kurla Complex.
The lease has a total term of 32 years, making it the country’s largest-ever lease transaction. FTSF will pay Rs 150 per sq ft in rent for the ground plus seven stories of the commercial structure.
A rental escalation clause in the leasing agreement provides a 15% rental reset every three years. The lease's initial lock-in duration is ten years, and the first six months' rent will be waived to be used for fit-outs, according to the conditions of the agreement.
“The leasing agreement was finalized a few days ago, and the fit-out work will begin soon,” stated one of the individuals described above.
Equinox Business Parks has one of the lowest density business parks in and around the BKC business district, with only four towers spread over ten acres, ensuring adequate room for safe social distancing, which is one of the primary elements driving occupiers' lease transaction decisions.
Brookfield Asset Management did not respond to a request for comment for this storey. Executives from the FTSF could not be reached for comment.
With this transaction, the Business Park's occupancy level had risen to nearly 100%, up from 40% when Brookfield Asset Management purchased the property. Equinox Business Parks, with 1.25 million sq ft of leasable area, was purchased from its former owner and developer Essar Group in 2018 for Rs 2,450 crore.
Brookfield Asset Management's real estate arm leased 350,000 square feet of office space at Equinox Business Parks to five clients in one of the country's most significant leasing transactions since the pandemic broke out last year.
Brookfield Properties then leased the property to Boston-based State Street Corporation, Hasbro, Vice Media, STTelemedia, a Temasek Holdings portfolio firm, and longstanding customer Tata Communications.
Despite being severely disrupted by the second Covid wave, office space demand in India remained resilient in the quarter ended June throughout the country's top seven markets. Companies in the information technology and IT-enabled services sectors that have escaped the pandemic's effects have been significant drivers of office space rental.
Experts believe that with the introduction of a nationwide vaccination campaign and India's office market is fundamentally driven by a thriving IT sector, and the market would be able to return to its previous high development trajectory shortly.