DLF Building and Services Private Ltd has acquired a 31,254-square-foot office property in Gurugram for Rs 81.04 crore, previously leased to WeWork India. Located at Two Horizon Centre, Sector 43, Gurugram, the office is among the city's premium office parks. DLF had constructed the Two Horizon Centre skyscraper. The seller, a non-resident Indian (NRI) with a Singaporean address, initially purchased the property in 2018 from DLF and leased it to WeWork for ten years. Despite global uncertainties, CRISIL projects stable net leasing in India's commercial office space in the mid-term.
DLF Building and Services Private Ltd purchased 31,254 square feet of office property in Gurugram for Rs 81.04 crore, which was earlier leased to WeWork India. The office is located at Two Horizon Centre in Sector 43 in Gurugram. According to reports, the seller is a non-resident Indian (NRI). The office complex is said to be among Gurugram's priciest office parks. For the deal, DLF paid a stamp duty of Rs 5.67 crore. The NRI with a Singaporean address had purchased the same property from DLF in July 2018, and then leased the space to WeWork India Management Private Ltd in September 2018 for ten years. DLF, a leading lease-rental company, originally built the Two Horizon Centre skyscraper, sold numerous office levels to important families and corporations between 2014 and 2019, but then stopped selling. DLF repurchased Hines' 51.8% stake in one tower for Rs 780 crore in 2021 and currently owns 60% of the Horizon Centre. WeWork India was leasing out this office space for Rs 135 per square foot per month. The lease included a rent escalation clause of 15% every three years, beginning with the date of rent commencement. WeWork India was assigned a BBB- rating by ratings agency ICRA in January, with an occupancy level of 87% in October 2022, up from 52% in May 2021. It had approximately 68,000 desks at the time, spread across 39 micro-markets in Bengaluru, Delhi, Hyderabad, Mumbai, and Pune. WeWork India is a franchise concept, with the Bengaluru-based Embassy Group owning around 71% of the company and WeWork Global owning a minority position. WeWork Global, the Softbank-backed co-working office space provider filed for bankruptcy earlier this month. However, WeWork India is a separate entity and reported a net profit of Rs 60 crore in FY23 on revenue of Rs 1,400 crore and an operating profit of Rs 250 crore. According to CRISIL, net leasing of commercial office space in India will remain stable this fiscal year at 32-34 million square feet (msf), with global uncertainties causing caution among key tenant categories. However, the inherent strengths of the Indian market and increasing shift to return to office should help demand pick up over the medium term, keeping credit profiles of office assets relatively stable.
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