Realty firm Bhutani Infra is investing Rs 1,200 crore to develop a commercial project in Noida (UP) to tap into the rising demand for office space from corporates and co-working players, a top company official said. The company has so far completed about a dozen commercial projects in East Delhi as well as Ghaziabad and Noida. “We are currently developing a commercial project ”Alphathum” in sector 90, Noida, comprising about 45 lakh sq ft of built-up area,” Bhutani Infra CEO Ashish Bhutani said.
Of the total area, around 35 lakh sq ft is for office space and seven lakh sq ft for a shopping mall. The rest will have 500 studio apartments. Asked about investment, Bhutani said the total project cost is about Rs 1,200 crore which is being met through internal accruals. The company has adopted both sale and lease model to monetize this project. The average selling price is Rs 8,000 per sq ft. It has already leased 1.5 lakh sq ft area to a co-working player.
Bhutani said the office towers are expected to be completed by year-end, while shopping malls and studio apartments are likely to be executed over the next two years. “Noida always had a big demand for commercial space as the percentage of land allotted for a commercial purpose is very less in comparison to residential,” he said. Bhutani said the office rentals in Noida are affordable compared to Gurugram, Haryana.
In contrast to the sluggish housing sector, Indian commercial real estate has been performing well driven by demand from high-quality office space from corporates and co-working operators. Introduction of Real Estate Investment Trust (REITs) is also expected to help developers in monetizing their commercial assets. Office space leasing increased 36 percent to a record of 31.8 million sq ft in the first six months of this year across nine major cities on strong demand from corporates, helping this segment attract USD 1.5 billion capital, property consultant CBRE recently said.