Four years back when Godrej Properties entered into an agreement with Jet Airways to jointly develop a piece of prime land owned by the later at Bandra-Kurla Complex (BKC) with substantial financial investment, real estate experts were unimpressed and were negative.
Today, when the tide has turned with changing business environment and corporates looking for high quality office space, Godrej Properties, the real estate arm of Godrej Group, has struck gold.
On Wednesday, Godrej Properties announced the sale of 4.35 lakh sq.ft. of saleable area at its commercial project, Godrej BKC in (BKC), Mumbai for a total consideration of Rs.1,479 crore. This is India’s largest ever single end-user commercial real estate transaction in value the company informed the stock exchanges.
The office space in the under construction building has been sold to pharmaceutical major Abbott India, the local arm of U.S. giant Abbott Laboratories. Abbott India plans to make Godrej-BKC its India headquarters.
“Given the current environment we are very excited to have closed this deal. We are very happy,” Pirojsha Godrej, Managing Director & CEO, Godrej Properties told The Hindu .
“We were correct when we entered into this project. Then everybody was negative because the commercial real estate market was weak. Now that the business sentiment has improved, there is no fresh supply of high quality office space available. Demand has improved and today we have been proved right,” Mr. Godrej said.
It took a few months of negotiations to clinch this deal. While substantial amount of money has already been paid, the balance will come in the next nine to 12 months before handing over possession.
Godrej BKC, with 1.3 million saleable area, is slated for completion and ready for occupancy in mid-2016.
Godrej Properties has partnered with Jet Airways for this development. While Jet Airways will occupy 2.5 lakh sq.ft. space in this development, over 3 lakh sq.ft. space has already been sold to other companies. Another 3 lakh sq.ft. area is yet to be sold.
“Now that we have got very good tenants in this development, it will not be difficult to sell,” Mr. Godrej added. Large part of the proceeds of this deal will go towards retiring the company’s debt which was mobilised for this project.
Godrej BKC has been planned as the India’s premier office address. The project has been developed in collaboration with Skidmore, Owings and Merrill (SOM), a leading architectural firm that has designed the world’s tallest building, the Burj Khalifa in Dubai and the Freedom Tower in New York. L&T is constructing the project. It is the only building in BKC to have received a LEED Platinum pre-certification.
“We look forward to delivering Godrej BKC to the highest global standards of design and quality. This deal will be an important driver of our plans to unlock capital invested in our commercial portfolio and will hasten the pace of our growth going forward,” Mr. Godrej said.
