by THO
Several banking firms and asset management companies have of late bought commercial properties in Mumbai rather than take them on lease. A case in point is Nippon Life India Asset Management Ltd that recently acquired two premium commercial properties at One Lodha Place in Mumbai’s Lower Parel locality for a combined value of ₹486.03 crore.
This trend of financial firms buying commercial space rather than leasing reflects a strong belief in the business environment and a confidence in the sustainability of the economic ecosystem, said experts.
According to property documents shared by Square Yards, the Nippon Life India Asset Management Ltd transactions, both registered in November 2024, involve a total area of 4,846.01 square meters (around 52,162 square feet). The first acquisition, valued at Rs. 245.18 crore, spans 2,444.56 sq. m. (around 26,313 sq. ft.), with a stamp duty of Rs. 14.70 crore and includes 44 car parking spaces.
The second acquisition, valued at Rs. 240.85 crore covers 2,401.45 sq. m. (around 25,849 sq. ft.), with a stamp duty of Rs. 14.45 crore and includes a total of 43 car parking spaces, property documents accessed by Square Yards showed.
An email has been sent to Lodha Group.
“Mumbai, as India’s financial capital, continues to attract both domestic and multinational firms, particularly in the BFSI sector for self-use, reflecting its vital role in the country’s economic landscape,” said Anand Moorthy, co-founder and CBO, Capital Market & Services, Square Yards.
Opting to buy rather than lease signals a company’s commitment to long-term growth and stability. It reflects a strong belief in the business environment and a confidence in the sustainability of the economic ecosystem. In Mumbai, especially, which is the financial capital of India, this decision becomes even more significant, he said.
For BFSI firms, investing in property rather than leasing can be a strategic move, reinforcing their position as key players in a dynamic market and signaling confidence in the future prospects, he added.
While Bandra-Kurla Complex (BKC) remains a flagship commercial hub, there is a noticeable uptick in demand for office spaces in micro-markets such as Lower Parel, Andheri, and the Malad-Goregaon corridor from MNCs, said Moorthy.
“We anticipate a strong and sustained commercial demand in key localities, particularly for Grade-A office spaces, since the vacancy in such buildings in Mumbai is negligible. We are also witnessing more than a 40% increase in market value for Grade-A spaces for the first time in a decade, highlighting Mumbai’s status as a global business powerhouse,” he said.
Earlier this year, ICICI Prudential Asset Management Company Limited had purchased 1,464 sq m of land along with a commercial space comprising 12 floors spread across an area of 63,000 sq ft in Santacruz East, near Mumbai International Airport, for ₹315 crore, according to documents accessed by FloorTap.com
“Santacruz east is an emerging business precinct as grade A office demand is spilling over from BKC. As a real estate observer, I am glad to see that institutional investment is chasing commercial real estate investment. ICICI AMC has smartly invested in a future growth corridor early,” said Abhishek Kiran Gupta, CEO and co-founder, CRE Matrix and Indextap.com
Outright purchase of office space by banking companies
Kochi-based Federal Bank had bought around 1.01 lakh sq ft of office space spread across five floors for ₹330 crore in Mumbai’s Wadala area in a building known as VIOS Tower, documents accessed by Propstack had shown.
“We’ve seen multiple domestic banks purchase commercial space in Mumbai over the last few quarters. On the other hand, international financial institutions have been leasing significant space for the long term. Banks with strong earnings and capital tend to benefit from tax advantages when they purchase properties. Over time this can also lead to capital appreciation. Besides, they have more control on the costs including any rent increases and other factors that may have an impact on the business,” said Raja Seetharaman, co-founder Propstack.
Earlier this year, Unity Small Finance Bank purchased commercial properties in two separate locations in Mumbai in deals valued at around ₹400 crore, property registration documents showed.
“Large corporates and business conglomerates, particularly from technology and BFSI sector, having clarity over long-term real estate requirements, perhaps find it economically more viable to own commercial assets,” said Vimal Nadar, who heads research at property consultancy Colliers.
Also Read: UK consulate buys office space in Mumbai’s Lower Parel area from Lodha Group for ₹101.2 crore
