Tolani Group to sell prime office property in Mumbai

Written by Shubhra Tandon | Mumbai | Updated: Nov 17 2012, 08:46am hrs
The Tolani Group, which has interests in the shipping business, is looking for an outright sale of around 5,600 square feet of commercial space in Bakhtawar, a commercial office building in Nariman Point, Mumbai. The company is expecting to sell the space for between R40,000 to R41,000 per square feet, according to people close to the development. The asking price is almost twice the last major transaction in the area reported in January this year.

The deal for the office space on the 12th floor of the building in Mumbai's prime office area will work out to be around R22 crore, if sold at the expected rate. It is currently given on lease to a foreign bank, said sources. The Tolani Group did not want to comment on the proposed sale.

The last outright sales deal in Nariman Point is understood to have happened in Tulsiani Chambers (considered a B Grade building), when early this year, the Bank of America sold a 11,000 square feet space to Tribhovandas Bhimji Zhaveri (TBZ) for about R25,000 per sq ft.

Grade B buildings are usually highly functional, well-located facilities more than 10 years old, which feature less desirable design and infrastructure than Class A buildings.

Consultants tracking commercial real estate say Tolani's expectations could be on the higher side. The lease rentals in the building though are believed to be quoted at around R300 per sq ft, say market sources. Tolani is aiming to close the deal in a months time.

The commercial offtake in Nariman Point has seen some sluggishness over the last few years. However, a few buildings which have upgraded themselves and have modern facilities continue to attract tenants and buyers.

"There are a number of traders, jewellers, merchants and people with family owned-businesses who have base in South Mumbai area and would not want to travel to suburbs daily for their work. These will continue to occupy spaces in Nariman Point," said a real estate consultant advising on deals in this area.