Business conglomerate Max Group has developed a new office complex at Okhla in the national capital with an investment of Rs 140 crore, as part of a strategy to grow its commercial real estate business. This is the second commercial real estate project of the group, with one already completed in Noida last year at an investment of Rs 600 crore.
Max Estates, the subsidiary of Max Ventures and Industries Ltd (MaxVIL), has almost completed the first phase of the commercial project named Max House at Okhla. The tower has 1.05 lakh sq ft of Grade A office space, which will be leased to corporates.
The second phase of this project, having a similar size in terms of area, will get completed by 2022. “Max House has been conceived in two phases. Phase 1 of the project measuring 1,05,000 sq ft of leasable area is almost complete,” said Rishi Raj, Chief Business Development Officer, MaxVIL. He expected the first phase to be leased within a year of its opening. The rentals per month are likely to be around Rs 120 per sq ft.
“This is the only Grade A building in Okhla and adjacent South Delhi micro markets. The total investment in the first phase has been Rs 140 crore and we expect an income of nearly Rs 20 crore annually at steady-state from leasing and other services,” said Rishi Raj.
He said the demand for quality office space in Delhi-NCR would be least impacted due to coronavirus pandemic, in view of a limited supply of Grade A workspace in this region. “We expect Grade A office space demand in Delhi NCR to be least impacted among all metros as Grade A supply was already constrained in this region and would be further curtailed due to overstretched balance sheets of some developers,” Rishi Raj told PTI.
He expects the office demand to recover from October-December quarter onwards. “Offices from trusted brands will be preferred over strata sold offices as there is the belief in the quality of hygiene led measures such as screening, sanitation, air filtration, etc essential for safe working,” he said.
The demand will also be driven by trends such as de-densification and de-consolidation. To lease office space amid this pandemic, Max Estates is using technologies to reach out to prospective clients and offering zero CAPEX plan on fitouts and interiors.
Max Estates said that there is a lot of interest from corporates who are looking to shift from the central business district (CBD) to South Delhi to save their rental outgo. MaxVIL’s other subsidiary Max Asset Services Ltd will provide services such as building operations management, as well as managed offices for enterprises.
On the first commercial project ‘Max Towers’ in Noida, Uttar Pradesh, Max Estates said that out of total 6.15 lakh sq ft project, 2.63 lakh sq ft is already sold. As on date, over 50 percent of Max Towers is leased out at a weighted average rental of about Rs 100 per sq ft per month.
List of Max Towers tenants includes co-working major ‘Spaces’, law firm Khaitan & Co, power trading company IEX and USA-based MNC Emerson. Net leasing of office spaces stood at a record 470 lakh sq ft across major cities during the 2019 calendar year, but demand in the first half of this year remained subdued due to COVID-19.
Max group has a major presence in life insurance, health and allied sectors, and packaging businesses. It now aims to become a leading player in commercial real estate as well. The USD-3 billion group has three holding companies — Max Financial Services, Max India, and MaxVIL.
Last month, Max India Ltd’s arm Antara Senior Living announced foray into the Delhi-NCR market with a new housing project for the elderly at Noida. It is targeting a sales revenue of around Rs 550 crore over the next four years from this project.
(With inputs from FinancialExpress)