Indian Express buys 15,000-sq ft office space in South Mumbai for Rs 34 cr

In a rare sale deal in South Mumbai's prime business district of Nariman Point, The Indian Express media group has bought 15,645 sq ft of space in the Mafatlal Centre building for Rs 34 crore or Rs 21,732 a sq ft from Japanese company Mitsui & Co, according to registered documents.

The deal includes four covered plus three open parking slots.Indian Express was functioning from the iconic Express Tower, adjacent to Mafatlal Centre. Sources said the Express would vacate media operations from Express Tower following the deal. It is likely to keep a small office in the building.

An e-mail to the Express did not elicit a response. Mitsui & Co declined to comment.

A consortium of global private equity giant Blackstone and Pune-based Panchshil bought Express Towers from owners ICICI Venture and Viveck Goenka a couple of years earlier.

The previous major sale transaction happened at Nariman Point in the fourth quarter of 2015, when IFCI sold 15,640 sq ft to Union Bank of India at Earnest House, according to commercial property analytics firm Propstack. And, in the second quarter that year, French company Societe Generale sold 15,336 sq ft to Reliance Corporate IT Park at Maker Chambers.

“It is rare to see a deed of assignment (sale) transaction at Nariman Point. That said, the rate is attractive and it makes strategic sense for Express to stay close to their historic HQ. It might have also provided Mitsui an opportunity to liquidate their asset with decent returns. Overall, a win-win for both parties”, said Raja Seetharaman, director at Propstack.

Capital values for Grade-A buildings in Nariman Point are Rs 25,000 to Rs 28,000 a sq ft.

Ashok Kumar, managing director at Gennext Partners, said it sounded a good value deal for the buyer, despite the depressed real estate market conditions and Nariman Point losing its charm to other commercial centres. “The capital value should have been  little higher, as this building is in a good location, is reasonably managed and has a much better carpet/SBA ratio vs new buildings,” he said.

However, it also sounds strange, as IE sold their own Express Towers to Blackstone/Panchshil only two years ago, he added. Experts say Nariman Point has lost its earlier charm to the Lower Parel and BKC commercial areas in the city, which have better buildings, connectivity and lower rents.