Prestige Group aims for a 10x growth in office rentals
![](https://retale.co.in/wp-content/uploads/2023/06/prestige-group-aims-for-a-10x-growth-in-office-rentals--1296x700.jpg)
TheĀ Prestige GroupĀ is looking at 10x growth in its rental income from office assets in excess of Rs 3,000 crore over the next five years. It plans to rebuild its income-generating office after selling it to the private equity firmĀ BlackstoneĀ two years ago.
The company plans to develop 40 million sq ft office assets across significant markets likeĀ Bangalore,Ā MumbaiĀ andĀ Hyderabad, amongst other markets, over the next five years. It currently has 40 mn sq ft of completed office assets across these markets.
āWe were earlier doing strata sales but are now developing large parks and rebuilding assets across offices, malls and hospitality, and venturing into newer segments like data centers,ā saidĀ Irfan Razack, chairman and managing director of Prestige Group.
According to analytical firmĀ Jefferies, office lease income should hit Rs 2500 crore, with 50% from Mumbai projects, where completion is back-ended. The remainder is expected from the core Bangalore-IT office business a
In 2022, the Bengaluru-headquartered firm retired its debt by concluding a $1.5 billion sale of a commercial portfolio, including offices, retail malls and hotels, to Blackstone. The deal also saw Blackstone acquiring over 16.8 million sq ft of completed and under-construction office projects and retail malls, apart from hospitality assets and solar power plants.
Real estate developer Prestige Group has projects worth over Rs 12300 crore across major markets like Mumbai and Bangalore under the planning and construction stage. It is investing more than Rs 3,500 crore to develop around 7 million sq ft of commercial real estate in Bandra-Kurla Complex (BKC) andĀ Turf ViewĀ at Mahalakshmi in south Mumbai alone. It is also developing two large projects in Bangalore, Prestige Lakeshore and Prestige Century landmark, totaling 7 million sq ft.
āThe office market has a general trend of a small blip every 10-12 years ā¦ we have had a bull run for a long time, and this momentary sluggishness will be fast forgotten given that tech companies, GCC and homegrown domestic companies and Startups will continue their robust growth The next ten years the India office market is going to grow in a great pace and we are gearing up for this,ā said Juggy Marwaha, CEO, Prestige Office Venture.
The realty firm is also looking to grow its data center business with plans to develop two more data centers in the coming years. Recently, NTT has agreed with the Prestige Group to create a 100 MW data center in Bangalore with a million sq feet gross leasable area (GLA) of buildings over three phases, marking the south-based developerās foray into the data-center business in India. The total value of the transaction, including land and infrastructure development costs, is Rs 700 crore.
āWe have recently ventured into this segment, and depending on the success, we will develop more data centers as it requires power and quality infrastructure,ā said Razack.
In May, realty developer Prestige Estates Projects made two strategic acquisitions to attain complete ownership of two key projects in central Mumbaiās Bandra-Kurla Complex (BKC) and South Mumbaiās Mahalaxmi locality by acquiring the balance stake from DB Group for a total consideration of over Rs 1,176 crore. Both projects are under construction and expected to be completed within 3- 4 years.
The Indian office space market has moved into the slow lane amid global geopolitical tensions, with large corporates consolidating its portfolio. Office leasing activity increased 9% year-on-year to 12.6 million sq ft during the January-March period.Ā Bengaluru, Delhi-National Capital Region (NCR) and Chennai accounted for 62% of the transactions during the quarter, according to a CBRE report. However, the demand for data centers in India continues to rise, with $20 billion expected investment by 2025.