HDFC Bank Likely to Buy Office Space in Lower Parel for 220 cr

Lender is close to acquiring 1.3-l sq ft of commercial space in Peninsula Biz Park

KAILASH BABAR MUMBAI 

In one of the largest outright office space deals, HDFC Bank is close to buying nearly 1.3 lakh square feet of commercial space spread over four floors in Peninsula Business Park at Lower Parel in central Mumbai, according to persons who are involved with the transaction. 
The bank is paying around . 17,000 per square foot totalling nearly. 220 crore for acquiring the office space in Peninsula Business Park's 20-storey tower-B owned by Alok Realtors, the real estate arm of Alok Industries. 
Emails sent by ET to both HDFC Bank and Alok Industries went unanswered. 
HDFC Bank is expected to pay the nearly . 220 crore in two instalments. The bank will use the office space to expand its operations and will also shift some of its current operations from other offices, said one of the persons. Along with the commercial space, that can accommodate over 1,500 employees, it will also get parking slots for nearly 150 cars under this deal. 
The deal is part of Alok Industries' larger plan to exit the real estate business. The company, through its realty arm Alok Realtors, had acquired this commercial building, part of the complex Peninsula Business Park, from developer Peninsula Land for . 1,075 crore in 2007. 
Amid the property boom, it was counted among the most expensive deals. The real estate market, however, has been on the decline since then, with a short recovery that lasted for just 10 months in 2009-10. 
The Alok group has already announced its decision to exit the real estate business completely. Eighty per cent of the building's total space of 641,000 sq ft is marked out for use by information technology (IT) and IT-enabled services (ITeS), while the rest is meant for commercial use. HDFC Bank is buying the space that has been marked for IT and ITeS operations. 
Central Mumbai, including Lower Parel, Worli, Dadar, and Prabhadevi with total available commercial space supply of nearly 9 million sq ft, has seen some key deals happening in the last three quarters. The vacancy level, that was around 24% here a few months ago, is expected to fall owing to these large deals, said a property consultant. The last major office space deal in Mumbai was also concluded in Lower Parel. 
Pharmaceutical major Cipla bought office space in Peninsula Business Park in a deal worth over . 270 crore to shift its existing 70-year-old headquarter at Bellasis Road in south Mumbai. 
On Monday, shares of Alok Industries closed at . 11.41 on the Bombay Stock Exchange (BSE), down 0.6% from Wednesday's close. Shares of HDFC Bank closed at . 682, down 0.7% over its previous close. 
kailash.babar@timesgroup.com