Morgan Stanley Secures Major Office Space in Mumbai
In a significant move, Morgan Stanley has signed a lease agreement for 1.1 million square feet of office space in Mumbai's Goregaon suburb. This marks one of the largest commercial real estate deals in India, with a lease value exceeding Rs 2,122 crore over a period of almost 10 years.
The agreement covers 16 floors in the Oberoi Commerz III tower, a prominent mixed-use commercial building. The lease term is set at nine and a half years, and the deal was finalized through Morgan Stanley's Indian subsidiary, Morgan Stanley Advantage Services.
This transaction was initiated in July 2020, amidst the peak of the Covid-19 pandemic. Negotiations were completed, and the final registration took place in the last week of August 2024. As per reports citing documents accessed through Propstack, Morgan Stanley has made a security deposit of Rs 104.9 crore for this deal.
The Oberoi Commerz III tower is part of the expansive Oberoi Garden City, a premium mixed-use development spread across 80 acres. Its strategic location near an upcoming metro station further enhances its appeal.
Trends in Office Space Demand
According to a report by Knight Frank India, large workspaces exceeding 100,000 square feet accounted for approximately 45% of the total office space demand in the first half of 2024. Transactions in this category reached 15.69 million square feet during the January-June period.
Spaces ranging from 50,000 to 100,000 square feet contributed 21% (7.28 million square feet) of the total office leasing during the same period. Notably, the demand for smaller office spaces under 50,000 square feet remains robust, accounting for 34% (11.7 million square feet) of the total demand in the first half of 2024.
Furthermore, a growing trend among companies, both domestic and international, is the increasing preference for flexible office spaces. Business Standard reports that flex office spaces now constitute 12.7% of overall leasing, a significant increase from 10.2% in 2019. The absorption of flex spaces has witnessed a surge since the pandemic, with companies taking up 155,000 seats in 2023 compared to 85,234 seats in 2021.