ICICI Securities, the financial services arm of ICICI Bank, secures over 188,000 square feet of office space in Mindspace Juinagar, Navi Mumbai, through a 12-year lease. The deal with Newfound Properties & Leasing entails monthly rentals of Rs 92.15 lakh, escalating 4% annually. Commencing on January 1, 2024, the lease includes exclusive access to 190 parking slots. The BFSI sector's rising office space demand, outpacing IT, is evident in this notable transaction, showcasing sustained growth in India's 2023 office sector. Despite global challenges, the year stands to surpass the 2017–2019 average in office leasing activity in India.
ICICI Securities, the financial services arm of ICICI Bank, recently secured a long-term lease for an expansive 188,000 square feet office space within the Mindspace Juinagar IT park in Navi Mumbai. This leasing arrangement, spanning over 12 years, entails the occupancy of five floors within one of the IT park's towers. The deal was facilitated by Newfound Properties & Leasing, a subsidiary of real estate developer K Raheja Corp. Under the terms of the lease, ICICI Securities is committed to monthly rentals amounting to Rs 92.15 lakh for the designated office space.
The agreement includes a provision for an annual 4% escalation in rentals, projecting the total pay-out to reach approximately Rs 166 crore throughout the entire lease term. The deal was officially registered on December 15, and the lease tenure is set to commence on January 1, 2024, according to documents retrieved through Propstack. Under the lease agreement, Newfound Properties & Leasing, the licensor, commits not to terminate the lease throughout its entirety. On the other side of the agreement, ICICI Securities, the licensee, is subject to a lock-in period extending over the initial five years.
A crucial aspect of the transaction involves an upfront deposit equivalent to 12 months' rent, surpassing Rs 11 crore. Additionally, the agreement grants ICICI Securities exclusive access to 190 parking slots within the commercial tower.
Despite global economic challenges, the Indian office sector has exhibited sustained demand growth throughout 2023. This resilience is indicative of robust demand fundamentals and the absence of enduring impacts from global headwinds. According to a recent study by JLL India, net office space absorption in the country is expected to reach 37–39 million square feet by the close of 2023, comparable to the figures observed in 2022. Furthermore, with leasing activities projected to gain momentum in the final quarter of 2023, the year is anticipated to surpass the average figures recorded between 2017 and 2019.
Over the past decade, the demand for office spaces within the banking, financial services, and insurance (BFSI) sector has outpaced that of the technology sector. Developers and operators of office complexes have also witnessed a surge in office space demand from India's domestic companies, driven primarily by the rising media, consulting, and BFSI sectors.
This marks a significant office lease transaction following the Union Government's authorization for floor-wise and partial denotification in IT special economic zones. This means that IT parks can now lease a portion of space to companies earning income in rupee terms. ICICI Securities, which already possesses a back office in Navi Mumbai, has expanded its footprint in the same location.
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