In an outright commercial transaction by an end user, French multinational pharmaceutical company Sanofi’s Indian subsidiary has acquired 150,000 sq ft of office space from L&T Realty at its new project in Powai, a suburb in Mumbai, for 220 crore, making it the largest in deal value so far this year.
The company is planning to shift its India headquarters from Andheri once this new built-to-suit exclusive building is ready, said two persons familiar with the development.[quote]The transaction was concluded and signed few days ago. Sanofi will be making the total payment of 220 crore for this deal in tranches linked to the progress of the building’s construction,[/quote] said one of the persons mentioned above.
L&T has already started construction of the proposed 10-storey office building that is expected to be delivered by mid-2015. The new building will be part of L&T Business Park, the commercial complex from where JP Morgan and L&T Infotech currently operate.
Email queries sent to Sanofi and L&T Realty remained unanswered. When contacted, Sanofi India’s spokesperson declined to comment while transaction advisor Jones Lang LaSalle India also did not offer any comment.
Currently, Sanofi India’s headquarter is located in Aventis House on Sir Mathuradas Vasanji Road in Andheri. The around 65,000-sq-ft building is spread over nearly 1.6-acre land parcel and the company may consider selling it after this transaction with L&T Realty, said one of the persons.
In India, the company operates through its five entities – Sanofi India previously known as Aventis Pharma, Sanofi-Synthelabo (India), Sanofi Pasteur India, Shantha Biotechnics and Genzyme India.
The new exclusive headquarter building at Powai will provide Sanofi India, which posted standalone turnover of nearly 1,600 crore in 2012, space for expansion and will also house offices of these entities.
In the last couple of quarters, several companies including multinationals have been taking advantage of a sluggish real estate market, particularly commercial segment to consolidate or move their headquarters to bigger and better offices.
Multinationals like Volkswagen, Bayer Crop Science, FedEx, PepsiCo and L’Oreal along with Indian majors such as Cipla, Britannia and HDFC have used the market trend to save on two fronts – cost and space. In December, global food & beverage major PepsiCo leased 1.5 lakh sq ft for its India head office in Gurgaon’s Golf Course Road Extension.
In one of the major office space transactions of 2012, pharmaceutical major Cipla bought 1.3 lakh sq ft, including a separate tower of a commercial complex in central Mumbai, for over 270 crore. German agrochemicals major Bayer Crop Science followed suit, and in a deal valued at 125 crore, bought an 8-storey office building in Thane from the Hiranandani Group to shift its India headquarters.
On Friday, shares of Sanofi India closed at 2,520.65 on the BSE, up 0.3% over Thursday’s close. Shares of L&T closed at 1,348.75, down nearly 1% over previous close.