The steel manufacturer will be occupying the entire 6th and 7th floor of the 15-storey commercial tower and will pay rental of Rs 250 per sq ft a month for the office space. The five-year lease agreement includes a clause to escalate rentals by 15% after initial three years. The company may extend the lease term by an additional five years.
The company’s total rental pay-out works out to Rs 72 crore over the tenure of the deal, while the company has paid security deposit worth six months’ rentals.
“We confirm that ArcelorMittal Nippon Steel India (AM/NS India) today shifted to a new office in Raheja Towers, which is strategically located in the Bandra Kurla Complex (BKC) business district. The modern office embeds a hybrid working model along with sustainability focus,” said a spokesperson of AM/NS India.
ET’s K Raheja Corp remained unanswered until the time of going to press. Transaction advisor Knight Frank India declined to comment for the story.
As a leading integrated flat carbon steel producer in India, AM/NS has an achievable crude steel capacity of around 9 million tonnes per annum. It produces a full diversified range of flat steel products, including value-added steel, and has a pellet capacity of 20 million tonnes.
In December 2019, ArcelorMittal acquired Essar Steel India for Rs 42,000 crore in one of the largest stressed-asset deals in India. Following this, the company tied up with Nippon Steel, the world’s third-largest steel producer. With its main facility in Gujarat’s Hazira, AMNS India is the top steel producer in western part of the country.
This is the third office lease transaction taking place in Bandra-Kurla Complex in the last two months for setting up the headquarters of the company strengthening the micro-market’s position as Mumbai’s de-facto central business district (CBD).
Earlier this month, IDFC First Bank leased a 10-storey BKC property, erstwhile Citibank headquarters, for a total 9 years from K Raheja Corp and Blackstone Group-backed Mindspace Business Parks REIT.
In October, fantasy sports platform Dream11 entered into an agreement with private equity major Blackstone Group-entity Nucleus Office Parks to pick up two entire floors spread over 120,000 sq ft on lease at One BKC to set up its headquarters.
After witnessing a sluggish pace of leasing for over a year due to the pandemic, lease transactions for large office spaces have started to gain momentum across key property markets.
Steady economic recovery, aggressive vaccination drives and increasing number of companies planning return of workforces to offices is helping the market recover from slumber.
The July-September quarter has already witnessed a sharp uptick in absorption of office spaces led by leasing activity in the information technology and IT-enabled services sector.