The Subrata Roy-led Sahara Group is picking up 3.5 lakh square feet of office lease space at a premium property in Mumbai?s Bandra Kurla Complex (BKC), signalling a shift of the group?s headquarters to from Lucknow to the country?s financial capital.

Going by the prevailing BKC rentals of R275-325 per sq ft per month, the lease at BKC?s Crescenzo could cost Sahara R10-11 crore a month or R100-110 crore a year, making it one of the costliest commercial lease deals in India.

The Crescenzo, one of the upcoming commercial buildings in BKC, is being developed by Mumbai-based Parinee Developers and designed by architect Hafeez Contractor. The 20-storeyed complex is spread over 10 lakh sq ft.

The building will have automated parking, advanced electrical and fire safety systems, professional building management services and a terrace helipad.

?Yes, we will be taking up Crescenzo on lease,? a Sahara spokesperson confirmed by e mail. ?We are looking at about 3.5 lakh sq ft.? He declined to give any further details.

The Sahara Group is one of the largest industrial houses of India with interests from financial services to cricket. Founded in 1975 by Subrata Roy, the group had assets worth $23 billion or R1.09 lakh crore as of 2010. Parinee, incidentally, is a passive partner in Kochi Tuskers, which was evicted from IPL.

Sahara’s latest interest is in sports, sponsoring India’s cricket and hockey teams. It owns Pune Warriors, an IPL team, and owns a 42.5% stake in Vijay Mallya’s Formula One team Force India, which was recently renamed Sahara Force India.

According to people familiar with the lease agreement, Sahara has been in talks for leasing the space for a while. However, the deal could not materialise over valuation mismatch. ?The company has yet again come to the table for discussions,? said a property consultant in the know of the development. He did not wish to be quoted as he cannot speak publicly on company-specific plans.

India’s commercial lease market has been sluggish in the second quarter of the financial year. According to CB Richard Ellis, a global property consulting and research firm, absorptions have almost halved in July-September compared with April-June.

Roughly 5 million sq ft of office space has been leased and purchased between July and September, compared with 8 million sq ft in the second quarter. ?This is almost 50% below the supply that came in the last quarter,? said the report published in October. ?It can be largely attributed to the increase in the cost and reduction in availability of debt, besides sluggish off-take of existing stock,? it adds.

In BKC, 1.55 lakh sq.ft space was absorbed in Q2, according to CBRE report. Market sources say Bajaj Finserve took up 75,000 sq.ft. space in The Capital by Wadhwa Developers in an outright purchase of a price of about Rs 26,000 to Rs 27,000 per sq.ft.

?The alternate business district of BKC continues to remain the preferred location for corporate occupiers looking for expansion in the quality office space,? says Anshuman Magazine, chairman and managing director, CB Richard Ellis South Asia.

?The rentals have been steady in the BKC market,? says Vijay Rajagopalan, director (office services), Colliers International. ?In terms of absorptions, the BKC market has never seen frantic activity because of high rentals compared to other areas in Mumbai and also high supply.?

(With inputs from Sohini Mitter)