As per the Maternity Benefits (Amendment) Act, 2017, every commercial office establishment having fifty or more employees shall be mandated to have a crèche facility / Day-care centre within such distance as may be prescribed, either separately or along with common facilities. Further notifications on distance, location etc. of such day care centres are expected soon.
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Mumbai office market has already started responding to the said provisions. In last 3 months, daycare centres have opened up in prominent commercial buildings in Key commercial office districts across Mumbai. We foresee greater demand for commercial spaces by crèches / day-care facilities in commercial hubs such as BKC, Lower Parel, Malad, Powai, Andheri, Navi Mumbai etc.
Enumerating few key transactions by crèches / day-care facilities in Mumbai:
Inspire BKC, BKC
Chicanino Childcare leased 4,805 sqft in Inspire BKC, a commercial building in Bandra Kurla Complex in July 2017. Chicanino negotiated a sweet deal with 5-month rent free period post completion of fitouts of the premises. After completion of 5-month rent free period, tenant shall pay Rs 90 per sqft per month for next 5 months. Rentals will increase by 38.4 percent to Rs 125 per sqft per month starting July 2018. We believe the landlord agreed to such attractive lease terms aimed at pitching presence of a crèche facility as an advantage / USP in his commercial building. This could potentially help attract other tenants.
Phoenix Paragon Plaza, Kurla
Ipsaa Day-Care leased 2,657 sqft in Phoenix Paragon Plaza, a mixed-use property in Kurla in May 2017. Ipsaa Day-Care shall absorb rent of Rs 80 per sqft per month for first 11 months. Rentals shall increase by 12.5% to Rs 90 per sqft per month starting April 2018. We believe, the crèche facility shall benefit commercially being part of a mixed-use project housing offices space and mall nested within a largely residential zone.
Chicanino Childcare leased 2,548 sqft in Boomerang, a commercial building in Powai in June 2017. Chicanino shall pay rent of Rs 92 per sqft per month. The said rental and lease terms are broadly inline with market. We believe Powai is an excellent location for a day-care facility as it houses significant Grade A office buildings occupied by global corporates.
The Nest leased 3,710 sqft (carpet area) in club house of Mindspace Business Park, Airoli in July 2016. The Nest currently pays higher of Rs 27 per sqft per month or 10% revenue share to the landlord. Mindspace Business Park is 5.7 million sqft SEZ IT Park and presence of a day care centre is more than needed due to large number of employees working in the IT Park.
Nirlon Knowledge Park, Goregaon
Ipsaa day care leased 2,838 sqft in Building B6 of Nirlon Knowledge Park, Goregaon in July 2013. The day care operator is currently paying rent of Rs 51 per sqft per month and is in last term of lease.
Rupa Solitaire, Mahape
Ipsaa Day-care leased 2,444 sqft in Rupa Solitaire, Mahape, Navi Mumbai in February 2015. The tenant is currently paying rent of Rs 39 per sqft per month.
Other commercial buildings which are currently operating day care centres are Reliable Tech Park, Godrej One, One BKC, Dani Corporate Park. Few occupiers such as L’Oréal, Johnson & Johnson, Standard & Chartered, Asian Paints have also provided crèche facilitiesin their leased/owned premises in Mumbai.
Few IT Parks / commercial premises or large occupiers were providing the crèche facility in Mumbai before the new amendment on maternity benefits was announced. Going forward, we expect increased activity within the day-care space (PUSH & PULL factors) across various commercial districts.