Amazon Data Services recently leased a premises in Thane for 15 years which can be further extended for 14 years.

The annual rent for the first year is Rs 74.91 crore, fir the second year the rent goes up to Rs 77.15 crore, for third year the rent is Rs 79.47 crore, the fourth year the annual rent is Rs 81.85 crore, the fifth year annual rent is Rs 84.72 crore, the sixth year annual rent is 87.68 crore, the seventh year annual rent is Rs 90.75 crore, the rent for the eight year is Rs 93.93 crore, the rent for ninth year is Rs 97.22 crore, the annual rent for the 10th year is Rs 100.62 crore, the rent for 11th year is Rs 104.14 crore, whereas the rent for the 12th year is Rs 109.79 crore, it goes to Rs 111.56 crore for the 13th year and the rent moves to Rs 115.46 crore for the 14th year and the annual rent for the 15th year is Rs 119.51 crore.

The total rent comes to Rs 1426.83 crore for the 15 years including the escalation, apart from this there’s an annual operating charges is Rs 23.39 crore, thus taking the total rent and operating charges for over 15 years to Rs 1450 crore.

According to details provided by Propstack, Amazon has leased a total are of 4.5 lakh sq ft spread across ground plus seven storey building along with a terrace in Thane’s MIDC from New Found Properties.

The land was leased by MIDC for 100 years in 1966 leased to a company, a part of this land was then leased to New Found Shelters, which is building an integrated Information Technology Township. It has already completed three buildings of the phase wise development.

Earlier this year, in one of Indians big ticket lease deal, a 2.39 lakh sq.ft. of land area was leased out for a whopping Rs 3.57 crore per month for a period of 258 months. Amazon Data Services India Pvt Ltd rented a 2.39 lakh sq.ft. space for a period of 258 months in Powai. The rental figure and the rented area both are huge and and in many ways amongst the biggest rental deals for the year 2022. The premises rented is a land parcel in Powai owned by Larsen and Toubro Ltd.

“Amazon continues to ramp up their data centers in India and Mumbai has emerged as one of their preferred locations. The new data centers will allow Amazon’s domestic and global customers to utilize AWS infrastructure to securely build their businesses in India and run their applications in the cloud. Clearly the cloud services business is an important one for Amazon while it prepares to locally expand their data centers to service Indian clients instead of servicing them from counties like Singapore,” said Raja Seetharaman, co-founder, Propstack.

Also Read: Amazon leases 2.3Lac Sq Ft for 258 months at a rental of Rs 3.57 Crore per month

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In one of Indians big ticket lease deal, a 2.39 lakh sq.ft. of land area was leased out for a whopping Rs 3.57 crore per month for a period of 258 months. Amazon Data Services India Pvt Ltd rented a 2.39 lakh sq.ft. space for a period of 258 months in Powai.

The rental figure and the rented area both are huge and and in many ways amongst the biggest rental deals for the year 2022. The premises rented is a land parcel in Powai owned by Larsen and Toubro Ltd.

According to registration documents provided by Propstack the deal was signed in June this year. A stamp duty of Rs 5.64 crore was paid for the registration of the lease deed.

The lease deal is for a total of 21.6 years, which means 258 months of these 24 months or two years is rent free.

The deposit paid for the land lease is Rs 99 crore, whereas the lock-in period for the lease deed is 180 months.

The rental also will see an escalation as the time passes. According to documents it is clear that Amazon would be building a data centre on the premises of the land they have leased from L&T.

A detailed email sent to Amazon and L&T seeking their response on the deal got us no response.

Some precious big ticket rental deals
Before this in July 2020 during the Pandemic Morgan Stanley had concluded negotiations and reached a deal to lease up to 1.1 million sq.ft. office space for 9.5 years from Oberoi Realty in Commerz III, Goregaon.

This year too according to reports Morgan Stanley leased an additional 3.35 lakh sq.ft. The total rent is nearly Rs 2,000 crore for the entire tenure of 9.5 years.

In July 2020 Godrej Fund Management leased 2 lakh sq.ft. office space to A.P. Moller – Maersk’s business units in Mumbai. The space is located in Godrej Two, Vikhroli. The lease amount was Rs 13.09 crore.

Also Read: Oberoi Realty Ltd signs 18 acre Thane land deal

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By Varun Singh

Normally it is believed that the real estate industry of Mumbai Metropolitan Region (MMR) is way ahead of the other cities.

However, in terms of office leasing many cities have left behind MMR when it comes to office leasing.

These cities are way ahead of the west cities that comprises of MMR and Pune in office leasing.

So which are these cities? There are three cities that have beaten MMR and Pune in West and the National Capital Region (NCR) in the North.

According to Anarock Property Consultants, the cities that are dominating the office leasing spaces are the three cities from South of India.

The main Southern office market have overtaken other regions in terms of new supply, net absorption, and even rental growth. Among the top 7 cities, Bengaluru, Hyderabad and Chennai saw their share of total office leasing increase to 66% in FY21 (against 47% in FY18). The net office absorption in FY21 in the top cities was 21.32 mn sq. ft., and these three southern cities absorbed approx. 14.06 mn sq. ft. MMR and Pune absorbed 4.56 mn sq.ft (21%) and NCR 2.3 mn sq.ft (a mere 11% share.)

In FY18, 31.15 mn sq. ft. of office space were leased in the top 7 cities. Of this net absorption, the Southern cities collectively accounted for 47%, the Western region 33% and the Northern region 17%.

In terms of new office supply too, the Southern cities continued to ramp up their share – from 40% in FY18 to nearly 63% in FY21. Of the total new office space completion of 40.25 mn sq. ft. in FY21 across the top 7 cities, the Southern cities had a 63% share (approx. 25.55 mn sq. ft.). The office supply share of the main Western markets shrank to just 19% in FY21 (from 40% in FY18.)

Anuj Puri, Chairman – ANAROCK Group says, “The remarkable growth in the office market of these three Southern cities when viewed against their Western and Northern counterparts is directly attributable to robust demand by the IT/ITeS sector, affordable rentals, and the exponential growth of start-ups locally over the past few years. The manufacturing and industrial sectors are also driving demand here.”

Rental Growth: Notably, between FY18 and FY21, office rentals in each of the southern cities have also shown double-digit growth. In this period, office rentals in NCR remained more or less stagnant while MMR and Pune saw a mere 2% and 8% rental growth respectively.

• In Bengaluru, average monthly office rentals were INR 67 per sq. ft. in FY18 – they increased to INR 77 per sq. ft. in FY21 (up 15%)
• In Chennai, average monthly rentals stood at INR 54 per sq. ft. in FY18 – they rose to INR 60 per sq. ft. in FY21 (up 11%)
• In Hyderabad, average monthly office rentals rose from INR 51 per sq. ft. in FY18 to nearly INR 57 per sq. ft. in FY21 (up 12%)
• In MMR, average monthly rentals increased from INR 123 per sq. ft. in FY18 to INR 125 per sq. ft. in FY21 (up by just 2%)
• Pune saw average rentals rise from INR 63 per sq. ft. in FY18 to INR 68 per sq. ft. in in FY21 (up 8%)
• In NCR, average office rentals remained unchanged in both years at INR 78 per sq. ft

Also Read: MMR Unsold Inventory Overhang Dips to 43 Months in Q2 2021 From 55 Months in 2020

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