MUMBAI: Realty developer K Raheja Corp has entered into a joint development agreement to develop a 3-acre prime land parcel in Pune’s Baner locality. The company has formed an alliance with a Pune-based developer Aditya Shagun Developers to develop the latter’s plot into a commercial office project.

The said land parcel has a total development potential of half a million sq ft. The project, once completed, is expected to be added to K Raheja Corp-Blackstone Group-backed Mindspace Business Parks REIT, India’s second listed Real Estate Investment Trust.

Currently, Mindspace Business Parks REIT’s portfolio consists of five integrated business parks and five independent offices aggregating 29.5 million sq ft of total leasable area.

“We will be developing the project together. Both the companies will be responsible for the branding and marketing of this project. We have already started the process to secure permissions for the development and hope to complete the entire project in 24-30 months by 2024,” said Rinku Shewani, partner, Aditya Shagun Developers while confirming the alliance.

The deal marks K Raheja Corp’s foray into the west Pune market that accounts for around 40% of total office space leasing in the city. The ongoing monthly rentals in micro-market of Baner range between Rs 75 to Rs 85 per sq ft.

“The western Pune corridor especially Baner and Balewadi is short on grade A quality office supply and hence this will be a very strategic development by K Raheja Corp. The profile of occupiers in this corridor is a mix of product development, digital, information technology-enabled services and research & development companies,” said Sanjay Bajaj, MD – Pune, JLL India, the advisor to this transaction.

ET’s email query to K Raheja Corp remained unanswered until the time of going to press.

Indian commercial real estate has started to make steady progress towards a sharp bounce back with rising space leasing despite the concerns of the emergence of work from the home model.

Pune, one of the key information technology and IT-enabled services hubs in the country, has seen a 128% sequential jump in office space leasing in the quarter ended December. The markets of Bengaluru and Pune continued to witness single digit vacancy levels, which augurs well for a strong rebound in these markets as economic and business conditions are expected to gradually improve in the coming quarters.

Large property developers with established market positions, strong balance sheets and adequate liquidity have weathered the ongoing uncertain business environment caused by Covid-19 pandemic better than smaller entities.

Consequently, the ongoing consolidation of the sector is expected to accelerate further, with larger and more established players gaining increased market share.



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