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Asian Paintscountry’s largest decorative paint The company has leased over 120,000 square feet of office space in Lower parel business district Mumbai,
New commercial Persons with direct knowledge of the development said that the office space is expected to be used as the center of their new business of home furnishing.
Asian Paints The space is leased for a total tenure of nine years including a lock-in period of five years. The paints major is expected to pay over Rs 166.32 crore as rental over the total tenure of the lease, excluding any rental escalation and maintenance charges.
“The agreement includes a clause to increase the rental by 15% after the initial 3 years and by 5% every year thereafter,” said one of the people mentioned above.
Last year, the company announced its foray into the home furnishing business and tie-up with premium furnishing brands. The alliance includes Asian Paints which manages the entire sales and marketing of the ranges offered by the collaboration and will focus on partner furnishing brand design and production. It has also ventured into the home decor business.
The office space in Lower Parel, formerly known as Vodafone House, was previously occupied by Vodafone India.
For the quarter ended September, Asian Paints reported a 31% rise in net profit at Rs 782.71 crore, a 20% increase in sales at Rs 8,430.60 crore.
Last week, the company announced a phased investment of Rs 2,100 crore to set up a new plant to produce vinyl acetate ethylene emulsion (VAE) and vinyl acetate monomer (VAM) in the country. The company announced an investment of Rs 550 crore to set up a white cement plant in the UAE in partnership with two local firms.
Asian Paints did not elicit any response to ET’s email query. Transaction advisor Cushman & Wakefield India declined to comment.
The recovery in commercial real estate, especially office spaces, has been broad-based following the COVID-19 pandemic, as indicated by the increasing number of small and medium-sized leases and one-time transactions across segments and key property markets.
The commercial office segment, which was hit hard by the pandemic, has made a strong comeback in the last 3-4 quarters owing to strong economic growth, increased recruitment and a return to office trend, a boom in the office sector.
The Indian office market grew significantly and delivered a strong performance in the first half of 2022. Office transactions were recorded at 25.3 million sq ft, a 107% year-on-year growth, indicating the market’s potential on the back of a looming pandemic and the promise of a sustainable economic recovery.
The IT and ITeS segments are among the key drivers of overall leasing activity in the top cities and bulk hiring by these firms will hit the demand for large quality office spaces.
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