Adani Group company, Terravista Developers Pvt Ltd, has recently concluded a significant real estate transaction with Finolex Industries. According to documents obtained by CRE Matrix, Terravista Developers has acquired leasehold rights of 25 acres of land near Pune for a substantial sum of Rs 470 crore.
The land was originally leased to Finolex Industries by the Maharashtra Industrial Development Corporation (MIDC) in the Haveli locality in Pimpri Industrial Area. The lease transfer was officially registered on April 3, 2024, with a significant stamp duty of Rs 23.52 crore paid for the transaction.
Terravista Developers has ambitious designs for the land plot. They plan to build a cutting-edge data center there – a project approved by MIDC. This highlights the increasing need for data infrastructure in the area, matching the wider trends of digital growth and technological progress.
An interesting facet of this deal is its lengthy lease term. Finolex Industries held the 95-year lease and now Terravista Developers acquire those leaseholder rights. They can renew the rights for another 95 years, affording immense operational flexibility.
This development marks a significant milestone in real estate transactions and reflects the evolving landscape of real estate and industrial development in the Pune region. The establishment of a modern data center by Terravista Developers is poised to contribute to the region’s economic growth and technological advancement, further solidifying Pune’s position as a key hub for innovation and investment in the digital age.
Kohli leased 12 office spaces totaling 18,430 square feet at the Reach Comercia corporate tower in Gurugram’s sector 68. The rental was set at around Rs 8.85 lakh per month.
Cricketer Virat Kohli has leased 18,430 square feet of office space in Gurugram to business firm Mynd Integrated Solutions for a yearly rental of Rs 1.27 crore, according to documents accessed by CRE Matrix.
According to the documents, Kohli leased up to 12 office spaces totaling 18,430 square feet in the Reach Comercia business skyscraper in Gurugram’s Sector 68 and the sale was locked in at a monthly rate of around Rs 8.85 lakh.
The stamp duty paid in the transaction was Rs 3.83 lakh, with registration costs of Rs 50,010. Mynd Integrated Solutions Pvt Ltd., situated in Delhi, is the deal’s lessee. The purchase was carried out through RCB star player Virat Kohli’s registered General Power of Attorney (GPA) holder, Vikas Kohli, who is also Virat’s brother.
Although the transaction’s stamp-duty registration was completed on June 22, 2023, the deal’s documentation was made public in March 2024.
The security deposit for the deal was Rs 57.19 lakh, and the starting monthly rent per square foot is Rs 48. 37 parking spaces are included with this workplace space.
There is a nine-year lease and the lease began on March 28, 2023, and the agreement’s rent began on July 1, 2023.
Documents revealed that the agreement called for a five percent annual rent increase and monthly common area maintenance fees of Rs 14 per square foot.
Former Team India captain Virat Kohli and his spouse, actress-producer Anushka Sharma, rented a residence in Mumbai’s Juhu neighbourhood for Rs 2.76 lakh a month in October 2022. Situated close to the Juhu beach region, the apartment boasts a sea view and is housed in the High Tide building.
According to real estate specialists, the high annual rental return that commercial real estate offers in contrast to residential real estate is the main driver of this trend. The amount a property owner makes each year from renting out a property is known as the rental yield.
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The green office leasing sector in India has witnessed significant growth and adoption in recent years, with a notable increase in the share of green office leases and the emergence of key market leaders in sustainable practices.
Increase in Green Office Leasing
Share of Green Office Leasing: The share of green office leasing in India has surged to 16% in the 2022-2023 period, marking a significant increase from the pre-COVID years.
Growth Predictions: The JLL – CRE Matrix report anticipates that the share of green office leasing is expected to reach 20% within the next year, highlighting the growing momentum towards sustainable leasing practices.
Market Leaders and Location Trends
Global Capability Centers (GCC): Global Capability Centers and institutional landlords have been at the forefront of driving sustainable practices, accounting for 76% of overall leases.
Leading Markets: Hyderabad and Bengaluru have emerged as the leading markets for green office leasing, constituting 64% of the total green lease market in India.
Analysis of Leases
The data revealed a substantial increase in leased area, with a 132% rise from 3.7 million square feet to 8.6 million square feet during the 2022-2023 period compared to the pre-COVID years.
Driving Factors and Challenges
Sustainable Practices: The joint efforts of asset owners and occupiers have been instrumental in promoting responsible leasing practices in the industry.
Challenges: The lack of industry-wide guidance, transparency, legal complexities, and split incentives have been identified as barriers to the widespread adoption of green leasing practices.
Key Aspects of Green Leasing
Focus Areas: Green leasing clauses primarily focus on waste management, energy efficiency, and data sharing, with a strong emphasis on reducing carbon footprint and promoting sustainable practices.
Energy Efficiency: Multiple clauses are centered around energy efficiency as an important instrument for reducing a building’s carbon footprint.
Expert Insights
Samantak Das: Samantak Das, Chief Economist and Head of Research and REIS, India, JLL, highlighted the incorporation of sustainability into the boardroom agenda and the significant progress towards sustainability in the Indian market.
Abhishek Kiran Gupta: Abhishek Kiran Gupta, CEO and Co-founder of CRE Matrix, emphasized the potential for green leasing to reach around 20% penetration within the next 1-2 years, with anticipated benefits for both landlords and occupiers.
Future Outlook and Mission
Environmental Sustainability: The realty sector is expected to play a key role in achieving environmental sustainability goals, with a shift towards green leasing being a crucial focus for the next two decades.
Emission Reduction Targets: India aims to reduce GDP emissions by 45% by 2030 and achieve net zero emissions by 2070, with the realty sector expected to contribute significantly to this mission.
The surge in green office leasing in India reflects a growing commitment to sustainable practices within the real estate sector. While challenges exist, the collaborative efforts of stakeholders and the potential for significant rental arbitrage demonstrate the promising trajectory of green leasing in the country.
As the industry continues to evolve, the adoption of green leasing practices is expected to play a pivotal role in driving environmental sustainability and operational efficiency within the commercial real estate market.
Explore the future of commercial real estate in India through our blog, where we delve into the surge of green leasing, the dynamic world of flex spaces, and key market insights for 2024.
The Rise of Green Leasing
What is Green Leasing: Green leasing involves renting or leasing commercial spaces in buildings that adhere to environmentally friendly and sustainable practices. These buildings are designed to minimize their impact on the environment through energy efficiency, waste reduction, and the use of eco-friendly materials.
In 2024, we foresee a remarkable surge in green leasing, a well-established preference among market clients. Historically, green leases accounted for approximately 15% of total leasing, but this figure is set to soar beyond 25%.
The allure of green buildings is undeniable, prompting landlords to position them as a key differentiator.
Premium Rentals: Green buildings will command a premium rental, with the gap between green and non-green leases widening to 15% in 2024. This underlines the growing emphasis on sustainable practices in the commercial real estate sector.
Flex Leasing
What is Flex Leasing: Flex leasing is a dynamic approach to office spaces that allows businesses to rent flexible and customizable workspaces. These spaces are designed to provide a versatile and adaptive environment, allowing companies to scale their office space based on their needs.
The contribution of flex leasing to total leasing in India is poised to rise from 11% in 2023 to an impressive 15% in 2024.
Major occupiers are expected to explore flex spaces, driven by the need for enhanced flexibility, a better work experience for employees, and increased convenience.
Supply and Demand Insights
Looking at the supply and demand game, Pune and Hyderabad are set to supply 60% of new offices in the next three years.
Why Does This Matter?: It opens the door for cities like Pune, Noida, and Navi Mumbai to offer more affordable options for businesses who aren’t fixed on being in the South.
Hotspots: The Macro Markets of 2024
The pulse of office leasing in India will resonate in five macro markets:
Gachibowli & High-tech City (Hyderabad)
Noida (NCR)
Navi Mumbai (Mumbai Region)
Nagar Road Kharadi (Pune)
Outer Ring Road (Bangalore)
These markets are destined to play a pivotal role in defining the trajectory of office leasing in the country in 2024. Subscribe to CRE Matrix for more in-depth Real Estate Data Analytics.
After being acquired by the Tata Group in January 2022, the airline now occupies blocks B, C, and E, which together cover 3.61 lakh square feet.
Blocks in E-Novation Centre, Sector 75, Gurugram, have been leased by Innovative Techno Park Pvt Ltd to Air India.
According to documents accessed by CRE Matrix, Air India has signed a lease deal to occupy commercial space spanning 6.2 lakh sq ft in Gurgaon, Sector 75, at an annual rent
of around ₹90 crore for 21 years.
The airline, which was acquired by the Tata Group in January 2022, has leased blocks B, C, and E at E-Novation Centre, Sector 75, Gurugram, from Innovative Techno Park Pvt Ltd for an average rent of ₹2.40 crore per month and ₹43.29 crore annually. The blocks span an area of 3.61 lakh square feet.
A ₹14.40 crore security deposit is included in the rent, which starts at ₹2.40 lakh per month. According to the records, the transaction involved the payment of ₹3.89 crore in stamp duty.
On October 18, the lease deed was registered.
Additionally, the airline has leased a space of 2.66 lakh square feet for ₹2.85 crore per month and ₹48.04 crore annually. it has paid a ₹17.10 crore security deposit for the transaction. On October 18, 2023, the lease was recorded, and ₹4.32 crore in stamp duty was paid.
The land has – 450 parking spaces.
According to the records, there is a 4 percent rent escalation clause in the agreement at the end of each year.
An earlier arrangement was inked by Air India Ltd to commercially lease Vatika One on One in Gurugram Sector 16 for five years at an annual rate of ₹24.05 crore, spanning seven floors and 1.80 lakh square feet.
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According to documents obtained by CRE Matrix, the HCC board of directors voted on November 9 to sell the land as part of the asset monetisation of debt resolution.
Infrastructure behemoth Hindustan Construction Company (HCC) sold a 2.35 lakh sq mtr land block in Panvel near Mumbai to Oak & Stone Construction Pvt Ltd for Rs 95 crore, according to registration documents accessed by CRE Matrix.
The property is in Karnala village, Panvel, Raigad district. The transaction cost Rs 5.70 crore in stamp duty and was recorded on December 4, according to the records.
The Board of HCC passed a resolution on November 9 to sell the land as part of the debt resolution plan’s asset monetisation.
In another major land deal in October, Bombay Dyeing and Manufacturing Company Limited (BDMC) finalized a significant land deal. BDMC signed the conveyance deed with Goisu Realty Private Limited, a subsidiary of Sumitomo Realty & Development Company Limited. As part of the deal, BDMC received Rs 4,675 crore for the sale of a 22-acre land parcel in the Worli area of Mumbai, including the associated Floor Space Index (FSI).
Elevate your decisions in real estate as a developer or broker with CRE Matrix‘s data-driven insights. Book a demo now.
Investing in commercial real estate can prove to be more beneficial when compared to residential properties. Commercial property owners enjoy the extra cash flow, the valuable economies of scale, the comparatively open playing field, the abundant market for good, reasonably-priced property managers, and the chance for a possibly larger payoff from commercial real estate.
Commercial Deal
But how do you assess the best properties? And how do the great deals differ from the duds?
Understand What the Insiders Know
To be a participant in commercial real estate, learn to think like a professional. For instance, understand that commercial property is estimated differently when compared to residential property. Income generated on commercial real estate is directly linked to its usable square footage. That’s not the case when it comes to individual houses. When it comes to real estate investment, commercial properties offer a bigger cash flow. Moreover, commercial property leases are longer when compared to single-family residences. This generally paves the way for larger cash flow.
Learn to Detect a Good Deal
The leading real estate experts recognize a great deal when they see one. How do they do that? First, they come up with an exit strategy. The finest deals are the ones you know you can move away from. It helps to have the eye of the landowner – always be on the lookout for damage that needs repairs, understand how to evaluate risk and make sure you get the calculator out to guarantee that the property meets your financial objectives.
Chart a plan of Action
One of the primary parameters of real estate investment of commercial properties is to ask yourself how much can you afford to pay and then shop around for mortgages to get an idea of how much you will pay over the life of the mortgage. Using tools such as mortgage calculators can assist you in coming up with great estimates of the sum cost of your home.
Seek Motivated Sellers
Just like any business, customers are majorly responsible for the growth of real estate. Your job is to seek them, specifically those, who are ready and willing to sell below the market value. The fact is nothing happens until you get a deal, which is generally accompanied by a motivated seller. This is someone with a strong reason to sell below the market value. If your seller isn’t motivated enough, they won’t be ready to negotiate.
Use a Three-Pronged Method to Asses Properties
You need to be adaptable when looking for good deals for real estate investment. Scour on the internet, read the classified ads, and hire experts to seek the best properties. Agents can assist you in seeking lucrative real estate investment in exchange for a referral fee.In a nutshell, these are some of the steps to follow to score a great real estate investment. Head over to CRE Matrix to look for great deals in the commercial real estate sector in India.
When you sign a commercial lease, it is a big step for your business. It is a new opportunity that can help drive your company to a new level. If the process goes well, you’ll have commercial space that saves your capital, accommodates your growth, matches your brands, and much more. However, if you sign a bad commercial lease, you could end up shelling more than required; acquire a bad space, or both for many years.
Commercial Buildings
Fortunately, the mistakes that result in bad commercial real estate decisions can be easy to avert, though. If you follow the below-mentioned steps, you can shield your business and set yourself to sign a great commercial property for lease.
Before you even begin to think about zeroing in on a specific building or a particular commercial space, you need to take a step back and conduct thorough research. You need to find out:
What do you require?
What you are willing to spend?
Where do you wish to be?
Where do you see your business progressing?
To do this, you will need to take a look at what you’re already doing in your current offices or other commercial spaces. Then, gather all the stakeholders together to comprehend their present as well as future requirements. Once you have completed your research, you will be ready to proceed to the subsequent part of the process.
Here are a couple of things to keep in mind to avoid signing a bad commercial lease:
Thoroughly Go Through the Details of Your Lease:
It’s extremely important to read the details of your commercial lease agreement prior to signing it. It is standard advice but is regularly ignored. Before you zero in on any commercial property for lease, it is vital to read your lease thoroughly as leases are complicated lease documents that can impact economics if a single word is misinterpreted.
Evaluate All Expenses
Signing a commercial property for lease shows you a whole array of different expenditures. Your rent and any proposed raise over the life of your lease are most probably significant, but they are the only expenses you will be paying. Pay close attention to the operating expenses of the building and how you will be accountable for them. If you can, try to get a gist of how the building is managed. If repair and maintenance expenses are less, it could signify greater expenses in the future as deferred maintenance causes more than regular repair bills.
Pay Close Attention to the End of the Lease Tenure
Before you select the commercial property for lease, you need to keep certain parameters in mind. One of them is the end of your lease. The ending of the commercial lease is as significant as the beginning. When your lease expires, you will either wish to leave the office space or continue with it. It’s much easier to prepare for both possible outcomes at the start as opposed to start planning when the end is right around the corner. The key to continuing in the same space is to have renewal options drafted into your initial commercial lease agreement.
In a nutshell, the above-mentioned are some of the factors that you need to take into account before you get a commercial property for lease. In this way, you will be able to avoid signing a bad commercial lease that will prove to be disadvantageous for you.
Head over to CRE Matrix to view various commercial leases across industries in India to understand real estate better.
The commercial real estate sector in India has developed and grown by leaps and bounds, particularly after the pandemic. Just like any other industry, the real estate sector was also impacted by Covid-19. But the sector slowly but surely bounced back. This has led to many more commercial properties that are taken on lease.
What is a Commercial Lease?
A commercial lease is referred to as a contract between two parties in which one party (the landlord) permits another party (the tenant) to exclusively use the plot or building or office space for a specific duration (the term) in exchange for rent or a premium.
If the lease is not properly handled, then it will result in years of disagreements, lawsuits, and extravagant expenses. When you take the viewpoint of the landlord, if the lease is not properly drafted, it can lead to a number of issues.
This is why you need to be careful before taking a commercial property for lease. Here are a couple of areas that you need to pay attention to while obtaining the commercial lease:
Space:
Prior to taking a commercial property for lease, it is vital to find out how much room is included in the rental. It is also important to clarify whether your rental expenditure was computed using rental square footage or available square footage. Since common areas including toilers, hallways, elevators and lobbies are not part of the usable square footage, it is usually less than the rental square footage.
Lease:
The period of a commercial lease is generally referred to as its ‘term’. It dictates the beginning and end dates of the lease contract, as well as whether or not there are specific renewal options. When it comes to longer lease terms, landlords are generally more flexible in negotiating leases but it is vital to keep the company’s requirements in mind as a longer lease generally means less flexibility in adapting to change as the company grows.
Termination
If you’re taking a commercial property on lease, you need to be aware of all the procedures that come with terminating a commercial lease early as well as the conditions for ending a lease before the automatic renewal takes place. If the lease does not state a right to cancel, do consider securing a right to end the lease early in exchange for the payment of a fixed sum of liquidated damages to the landlord as a means to get out of the contract.
Security
When you take a commercial property on lease, you need to make sure that it’s obvious what can be subtracted from the security deposit and what can’t. Although laws prevent specific acts involving security deposits, you need to ensure that the commercial lease lays out the expectations and conditions for its return.
In a nutshell, these are some of the factors that you need to pay attention to before taking a commercial property on lease.
Head over to CRE Matrix to get insights on various commercial leases from across different sectors in India.
An individual needs to undertake a massive amount of financial commitment brimming with uncertainty to clear the path for investing in CRE. Therefore, investing in commercial real estate must be made only after carefully considering all the risks involved. Commercial real estate investments are more complex when compared to residential investments because the taxes, regulations and taxes that are generally imposed on commercial real estate property are considerably more rigid when compared to residential properties.
Real Estate investment
What is Commercial Real Estate?
Properties that are generally used for economic or business activities are generally referred to as ‘commercial real estate’. CRE is extremely diverse and extensive, comprising everything from a single store to spacious multi-level shopping malls.
Hotels, hospitals, shopping centres, dining establishments, and office buildings are all examples that would come under commercial real estate.
To learn more about commercial real estate, you have to consider the following points:
Investors can make use of REITs (Public Traded Real Estate Investments Trusts) as a means to make indirect investments in commercial properties
Commercial property investment requires a bigger financial outlay as compared to purchasing a house. There is a stronger potential for gain as well as a bigger potential for loss in this industry.
Prospective rental income and capital appreciation are lucrative features of investing in commercial real estate.
As the name suggests, commercial real estate is the kind of property that is put to economic use.
How to Manage a Commercial Property?
Commercial real estate with tenants needs ongoing management on behalf of the property owner’s part. Thereby, a commercial property management firm can prove to be beneficial for property owners who require help with acquisition and retention, lease & financial administration, and marketing and upkeep planning. Managing office buildings, industrial complexes, and retail properties is a challenging balancing act that involves an abundance of information, transactional details, and results, thereby making the skillset of a commercial real estate management business priceless.
How to Make Money with Commercial Investment?
One way to guard your portfolio from the ups and downs of the stock market is to buy commercial real estate. By investing in commercial real estate, you can profit from the sale of their properties and the rents they gather from tenants.
Commercial buildings, like stores, have bigger returns on investment. Thereby, investors may wish to explore buying them (ROI). Ownership of the shop also lets the investor establish their own business, if not instantly, then at some point in the future.
Advantages of Investing in Commercial Real Estate
Here are a couple of advantages to investing in commercial real estate:
Security: Income generated from investing in commercial real estate is generally rather high. Relatively, residential rental yields are only approximately 1-2% of the property value of roughly about a third of the income CRE properties offer (9-12%).
Uniformity: Having a foolproof business plan increases the chances that CRE renters will pay on time.
Beneficial for Longer Tenure Commitments: Leasing a commercial property generally has a longer term, usually from one to two decades. Those who are investing in commercial real estate may rest assured that their income will be dependable and consistent thanks to it.
Relative Cost of Purchase: As opposed to residential residences, the long-term returns when investing in commercial real estate are far bigger. Additionally, investing in pricey real estate via financial ownership or REITs (Real Estate Investment Trusts) can yield strong returns on modest outlays of capital.
In a nutshell, investing in commercial real estate can prove to be hugely beneficial in India. If you wish to see additional insights on real estate and where to invest, then head over to CRE Matrix.
