Axis Bank buys 200,000 sq ft of office space in Mumbai

In one of the largest office property deals in this city, Axis Bank recently bought 200,000 sq ft of space at The Ruby office complex in the Dadar West area for Rs 320 crore, said an executive.

The deal was in the previous quarter and at Rs 16,000 a sq ft, said the executive. The Ruby Mills developed the property, a one million sq ft commercial project, in partnership with Rohan Lifescapes.

"It could be a structured deal, where Axis Bank could have lent money to the owners of the property in the past," said the executive, adding no broker was involved.

An e-mail to Axis Bank did not get a response. Senior executives at The Ruby Mills did not return calls or reply to messages on the subject.

Property experts said it was a good deal for Axis Bank. "Nearby buildings on the Senapathy Bapat Marg command prices of Rs 17,500 to Rs 18,500 a sq ft. So, the bank is getting an eight to 10 per cent discount," said Raja Seetharaman, co-founder at PropStack, a commercial realty services entity.

The commercial complex was developed on The Ruby's surplus land. It is one of the oldest textile mills in the city.

In 2010, Axis Bank bought 400,000 sq ft office building at Worli here, from Bombay Dyeing, for Rs 782 crore, one of the largest transactions that year.

That was at Rs 19,500 a sq ft. It then shifted its corporate headquarters from Cuffe Parade to the eight-storeyed tower located within the Bombay Dyeing mills compound, on Pandurang Budhkar Marg.

Commercial property market deals are picking up in the city. Last year, pharmaceutical major Abbott bought 435,000 sq ft in the Godrej BKC at the Bandra Kurla Complex, from Godrej Properties for Rs 1,479 crore.

In Mumbai, leasing of office properties doubled to 6.57 million sq ft in 2015 from 3.12 mn sq ft in 2014, said Colliers International, a multinational real estate services entity.

The banking, financial services and insurance segment led in absorption with a 34 per cent share, followed by information technology at 28 per cent and pharmaceuticals at 15 per cent.

"The office market of Mumbai has started showing strong fundamentals, evident from the revived occupier demand. With a new state government in place and positive vibes from the Centre in terms of favourable policies for the city's real estate and major infrastructure projects, 2016 is likely to augur well in 2016," said Colliers.