Hindustan Unilever House, the erstwhile headquarters of multinational consumer goods giant HUL, in the Churchgate (Backbay) area of South Mumbai, could have global tenants soon.
Foreign banks such as Royal Bank of Scotland (RBS) and Development Bank of Singapore (DBS) are among those which have shown keen interest to take space in the landmark office building, said a person close to discussions on the matter.
Domestic financial institutions Tata Capital and SBI Group, for its insurance business, have also shown interest, the person said.
“Though the building has got inquiries from multiple entities, the entire building could be leased out to a single party,” added sources in the know.
At least three parties had shown interest in occupying the entire building and four to five others for half the building, sources said. The building, a ground plus seven-storey structure, has total space of 154,320 sq ft.
HUL shifted to Andheri, in the western suburbs of Mumbai, after occupying the Backbay Reclamation office for nearly 46 years, to accommodate its growing needs. It could house no more than 900 people in the old office. In Bangalore, too, HUL shifted to bring all its staff under one roof.
HUL is expected to earn anything between Rs 60 crore and Rs 70 crore by renting out its Backbay office, property consultants say. Though they quote a rent of Rs 310 to Rs 325 a sq ft in the HUL building, the deals are finally expected to close at Rs 300 a sq ft.
“Since both DBS and RBS have offices in South Mumbai, it is easier for them to move to HUL house, which, being a heritage building, has a structure efficiency of 70 to 80 per cent. This will make overall costs much lower,” said a property consultant who did not wish to be named.
Structure efficiency refers to the ratio of built-up to carpet area in a building. As a general rule, the built-up area, which is carpet area plus thickness of walls and balconies, is eight to 10 per cent more than the carpet area, which is calculated from wall to wall inside a building.
“Very few office buildings in Nariman Point have 150,000 sq ft space now. That is the reason why there is so much interest,” the consultant said. HUL is said to have refurbished the elevators, air conditioning, lobbies, etc to get better rents in the old office.
“Since banks are consolidating their offices, BKC (the Bandra-Kurla Complex in central Mumbai) and Nariman Point (Backbay) are the only two options now. Since BKC is yet to have proper social infrastructure, Nariman Point is the first preference,”’ says Raja Seetharaman, national head, agency leasing, JLLM.
After years of playing second fiddle to newer areas such as BKC and Andheri in Mumbai, Nariman Point is bouncing back. According to estimates by property consultant Jones Lang LaSalle Meghraj, at least seven lease deals for 45,000 sq ft (BKC saw deals for 50,000 sq ft in the same period) have been made in buildings such as Hoechst House, Express Towers and One Forbes House in the past six months. That’s 50 per cent more than the previous six months. Like HUL House, most of the A-Grade buildings in the area had been refurbished to attract higher leasing.
