Canada’s TD Bank's India HQ lease in Mumbai’s BKC sets new record

Mumbai’s office property market has just set a new record in terms of highest-ever lease rentals anywhere in the country. Toronto-Dominion (TD) Bank has renewed its lease of India headquarters at Maker Maxity in Mumbai’s business district Bandra-Kurla Complex (BKC) at Rs 604 per sq ft a month surpassing the earlier benchmark of Rs 565 per sq ft, said persons with direct knowledge of the development.

The Canadian multinational bank’s deal comes in the back of recent other leases in India's costliest office address. Few months ago, LinkedIn renewed its lease in the same complex at Rs 565 per sq ft per month, while Bank of China also leased office space at Rs 500 per sq ft a month.

While the TD Bank lease is for over 1,600-sq-ft office, the rentals reinforce BKC and Maker Maxity’s status as the country’s most expensive office address, which was earlier held by CeeJay House on Dr. Annie Besant Road in Mumbai’s plush Worli locality. Ceejay House, with its monthly rentals scaling over Rs 450 per sq ft, was India’s most expensive office tower a decade ago.

Recently, Netflix also renewed its lease for an office spread over around 1.4 lakh sq ft in Godrej BKC, in this micro market.

Strong absorption of supply in the last two years post-Covid has contributed to the growth in rental as there is limited supply in Grade A buildings. BKC has not seen any new office building of significance developed in the last seven years, and there are no planned future supplies for the next 2-3 years.

Headquartered in Toronto, with more than 90,000 employees around the world, the Toronto-Dominion Bank and its subsidiaries are collectively known as TD Bank Group (TD). It offers a full range of financial products and services to over 27 million customers worldwide through three key business lines including Canadian Retail, U.S. Retail, and Wholesale Banking including TD Securities.

ET’s email query to TD Bank remained unanswered until the time of going to press.

The demand for commercial offices including front offices in BKC has remained resilient despite weak global trends. In the last one year alone, there has been a significant jump in demand for Grade A commercial spaces. These transactions align with the broader trend of BKC maintaining its allure for corporate occupiers and the continual trend of increasing rentals

According to real estate industry experts, this sustained interest in BKC is supported by its strategic central location, enhanced infrastructure, approachability to airports, easy connectivity through Bandra-Worli-Sea Link, and Sion-BKC connector from eastern expressway.

The recent opening of Jio World Plaza stands out as a transformative development in the business district. This retail and commercial hub, spearheaded by Reliance Industries, not only adds to the commercial landscape but also enhances the overall lifestyle and social infrastructure quotient of the micro market. Anticipation of forthcoming terminus for the Mumbai-Ahmedabad bullet train has also drawn interest from businesses, experts said.

India's commercial real estate sector is weathering global headwinds with resilience, thanks to its qualified talent pool and cost advantage.

Underscoring this trend, net absorption of office space across key property markets in the country recorded its strongest performance in 18 months in the September quarter.

According to recent data, leasing of office space in the top seven office property markets jumped to a six-quarter high of 10.37 million sq ft in the three months ended September, a more than 30% increase from the previous quarter.