HDFC Realty strikes Rs 100-cr property deal for Axis Bank

In one of the biggest office rental transactions in recent times, private lender Axis Bank is believed to have entered into a property lease deal worth about Rs 100 crore for housing its back office operations.

The property is being taken on a nine-year lease from Raheja Group and the deal has been arranged by HDFC Realty, sources said.

The deal was finalised at a rate of Rs 39 per square feet a month for an office space having area of over two lakh square feet. Axis Bank has agreed to pay a rent of Rs 82.4 lakh per month and applicable taxes for the property situated in a building at Airoli in Navi Mumbai area.

This is one of the biggest office property rental deals in this area as also in the entire Mumbai region.

Axis Bank has taken this property on a nine-year lease from K Raheja Corp for housing its back office operations. Both the parties were represented by HDFC Realty in the deal.

HDFC Realty, a real estate advisory services company, is a 100% subsidiary of financial services giant HDFC Ltd and is present in more than 23 cities across the country.

It offers advisory services in residential properties, commercial spaces and land to individuals, landlords, developers, occupiers, MNCs and financiers.

The deal comes at a time when the office rental business in India has been in mostly a stagnant mode.

According to a latest report by real estate consultancy Jones Lang LaSalle, the office rents "held generally flat" in India during the first quarter of 2013, and slow expansion by MNCs was partly offset by steady demand from IT/ITES firms.

However, the supply has remained robust. According to CBRE, key cities across the country witnessed supply of over 20 million square feet of prime office space in the first half of 2013, while total absorption for the period was less than 14 million square feet.

The supply was primarily from large commercial and SEZ developments which were completed in leading markets such as Bangalore, Mumbai, National Capital Region and Pune.

According to CBRE, about 7 million square feet of office space was absorbed in second quarter of 2013, as against 6.6 million square feet in the previous quarter.

However, downward pressures continued to persist as absorption was down by about 6% when compared to the same period last year.