Mumbai: In a dismal real estate market, Tata Consultancy Services (TCS) has signed an agreement with Neptune Developers to lease the largest IT office space in the city.
TCS will take over 3.5 lakh sq ft space in Neptune Element, an 11-storey IT building constructed by the developers in Thane’s Wagle Industrial Estate. The two parties are learnt to have negotiated the deal for a lease amount of Rs 35 to Rs 40 per sq ft per month, which works out to an annual rent of close to Rs 16 crore. A formal agreement is expected to be sealed in a few weeks.
TCS will take over 3.5L sq ft space in Neptune Element in Thane
A TCS spokesperson said, “We have signed a letter of intent to lease the space. A final agreement will be signed only after due diligence of the property documents.” About 3,000 staffers are expected to work on the new premises.
President (operations) of Neptune Group Nayan Shah declined to comment.
According to global property consultant Cushman and Wakefield (C&W), Mumbai, like other cities, has witnessed a significant addition to the IT/ IT-enabled services (ITES) supply of approximately 5.4 million sq ft in 2012, while only 3.6 million sq ft got absorbed. “The oversupply has led to huge vacancy levels, more than 20% in the city and close to 30% in certain micro markets such as Thane. Rentals over the next two quarters are expected to remain stable with a downwardbias,” said Ravi Ahuja, executive director, C&W. “Given that limited new projects are being launched for office developments in Mumbai, vacancy levels in IT/ITES are expected to reduce from the second half of 2013. Today, markets offer a good investment opportunity in Grade A IT parks in strategic locations for investors looking at 9% to 10% per annum yields, with a three to five-year capital appreciation,” Ahuja added.
A C&W report on the IT/ ITES in the Thane and Thane-Belapur belt says the trend for such companies to move from suburban Mumbai to Navi Mumbai and Thane continues unabated as locations such as Malad and Goregaon are increasingly becoming unaffordable, particularly to third-party operators like TCS and local BPOs, who cannot pay more than a dollar (Rs 50 per sq ft per month) as rent.
Source : TOI