Global investment bank Morgan Stanley has picked up 3.35 lakh sq ft of office space in commercial tower Oberoi Commerz III in the Goregaon suburb of Mumbai for a long-term tenure from real estate developer Oberoi Realty, said people with direct knowledge of the development.
This space take up is in addition to Morgan Stanley’s earlier transaction of 1.1 million sq ft of office space in the same office tower, taking its total deal size to 1.5 million sq ft.
The deal assumes significance not only because of its size but also because Morgan Stanley has pre-committed to the under-construction office space, as against the usual practice of leasing ready properties.
In July 2020, in one of the largest office leasing transactions in the middle of the Covid19 pandemic, the US-based bank finalised the deal to lease 1.1 million sq ft in this over 40-storey tower, one of the tallest mixed-use office towers in the country.
Both the deals will have a total tenure of 9.5 years and Morgan Stanley will be paying rentals of Rs 115 per sq ft per month, taking its total pay-out to nearly Rs 2,000 crore over the total tenure of the lease. The deal agreement also includes a rental reset clause every 3 years with a 15% escalation.
“The construction of the tower is in an advanced stage and is likely to be completed by the end of the first quarter of 2023. Morgan Stanley is expected to then take it up for fit-outs and to move in 9-10 months after that, in early 2024, “said one of the people mentioned above.
ET’s separate email query to Morgan Stanley and Oberoi Realty remained unanswered until the time of going to press. Transaction advisor JLL India declined to comment.
This is the largest space taken up by any company along the western express highway. The upcoming tower is part of a larger layout called Oberoi Garden City, spread over 80 acres, which is a premium mixed-use development in Goregaon located adjacent to the upcoming metro station.
Commerz III is a 2.9-million-sq-ft mixed-use building, and with this deal, over half of the tower is already pre-leased.
Morgan Stanley will be consolidating its Mumbai Global In-house Centre (GIC) operations to this single campus in the city. The investment bank established the Mumbai GIC in 2003 and the Bengaluru GIC in 2014 to support its global institutional securities, wealth management, and investment management businesses.
The under-construction tower is expected to become the base for one of the largest global insourcing centres (GICs) in Mumbai. This additional take up is testimony to the trend being witnessed across India’s office real estate with a number of multinational companies significantly growing their captive GICs, thereby validating the availability of an abundant talent pool in the country as being India’s key strength.
The global investment bank has been operating in India since 1993, and has an institutional securities platform, offering a range of investment banking, capital markets, equities, fixed income, private equity and derivative products, research, as well as growing investment management businesses.
We provides services in the real estate market catering to residential & commercial buyers and sellers, financiers & investors. Our expert advisory will help to fulfil the requirement of our customers & associates.