Morgan Stanley has secured a substantial office lease in Mumbai, committing to rent 1.1 million square feet of space in the Goregaon suburb. This agreement, valued at over Rs 2,122 crore, represents one of the largest commercial real estate transactions in India to date.
The investment bank has leased 16 floors in the Oberoi Commerz III tower, a prominent mixed-use commercial building, for a term of nine-and-a-half years. The deal was finalized through Morgan Stanley Advantage Services, the firm’s India subsidiary.
Negotiations for this lease began in July 2020, amidst the challenges of the Covid-19 pandemic, when Morgan Stanley first agreed to occupy the space. The transaction was officially registered in the last week of August 2024.
As part of the deal, Morgan Stanley made a security deposit of Rs 104.9 crore, according to documents from the realty data analytics firm Propstack. This lease stands as the largest office space deal in India for the year 2024.
The Oberoi Commerz III tower is part of the expansive Oberoi Garden City, which encompasses 2.9 million square feet within an 80-acre mixed-use development. Its strategic location near an upcoming metro station enhances its attractiveness for businesses.
Recent reports from Knight Frank India highlight a shift in office space leasing trends. In the first half of 2024, about 45 percent of office space demand came from large leases exceeding 100,000 square feet, totaling 15.69 million square feet. Additionally, spaces ranging from 50,000 to 100,000 square feet accounted for 21 percent of total leasing activity, amounting to 7.28 million square feet.
Leasing for smaller office spaces, defined as those under 50,000 square feet, also demonstrated resilience, reaching 11.7 million square feet, which is 34 percent of total demand.
There is a notable trend towards flexible office spaces among both domestic and international companies. According to Business Standard, flexible office leasing has risen to 12.7 percent of overall leasing activity, up from 10.2 percent in 2019. The absorption of flexible workspaces has notably increased since the pandemic, with companies occupying 155,000 seats in 2023, compared to 85,234 seats in 2021.
