Zydus Healthcare buys Mumbai office property for Rs 172 cr

It bought Walia Business Park building on Western Express Highway in Goregaon East

In one of the biggest office property deals in Mumbai this year, Zydus Healthcare has bought a 80,000-sq ft building in Goregaon for Rs 172 crore from the Walia Group, sources in the know said. The pharma company bought the Walia Business Park building on the Western Express Highway in Goregaon East in the fourth week of March, the sources said.

It wasn’t not known what Zydus, headquartered in Ahmedabad, will do with the property. A mail sent to Zydus Healthcare did not elicit any response.

The purchase price on carpet area is Rs 21,545 per sq ft and presuming building efficiency of 63%, the purchase price on chargeable area would be Rs 13,570 per sq ft, said Abhishek Tiwari, co-founder at CRE Matrix, a property data analytics firm.

"The transaction details seem aligned with overall market figures. Presuming the asset could potentially secure rent of Rs 95-105 per sq ft if fully leased out, the capital values would be in the range of Rs 13,000-14,400 per sq ft at prevailing cap rates of 8.75%," Tiwari said.

Premium grade-A buildings in Goregaon command average rent in range of Rs 100-130 per sq ft.

In 2017, Mumbai’s commercial real estate market has witnessed increased activity in owner-occupier and pre-leased segments. At least, a few of the recent transactions show the trend.

Recently, IT services company Netmagic entered into an agreement with the Hiranandani group and Balaji Tele- Developers to buy a 286,691-sq ft building in Lighthall, Chandivali area of Mumbai. It was the biggest office property deal in Mumbai in the past two years.

In February 2017, ICICI Prudential Life Insurance bought an entire floor of 60,000 sq ft (chargeable area), leased to Tata Communications, in Crescenzo building at Bandra Kurla Complex (BKC) micro-market of Mumbai for Rs 147 crore.

According to global realty consultant CBRE, office rents have remained stagnant in most office hubs of Mumbai since Q4 of 2014.

Two years ago, pharma major Abbott bought an office property in BKC for Rs 1,400 crore.

Zydus Cadila offers formulations, active pharma ingredients and animal health care to wellness products.