M3M Tee Point Office for Sale, Sector 65 Gurgaon

Office space for sale in M3M Tee Point Sector 65 Gurgaon is quoted at about Rs 12,000 to Rs 14,000 per sq ft, and brokers offering pre-leased units here advertise a "minimum 7 per cent rental return from day one".

The rate checks out. The guarantee needs reading carefully, and the first thing to know about it is where it does not appear.

The rate is internally consistent, which is rarer than it should be

Work the guarantee backwards. A 7 per cent return on Rs 12,000 per sq ft means the unit earns Rs 840 per sq ft a year, which is Rs 70 per sq ft a month. On Rs 14,000 it means Rs 980 a year, or about Rs 82 a month.

Now test that against the neighbourhood. Office space in a comparable Sector 65 tower is quoted at about Rs 70 to Rs 78 per sq ft a month. The implied rent lands exactly on the market rent. Nobody has inflated the rate to make a headline yield work, which is worth saying plainly because in this batch that is the exception rather than the rule.

But 7 per cent is not a generous number here

This corridor pays more than that without any guarantee at all. A Grade A building a few sectors away lets at Rs 60 to Rs 80 per sq ft a month and sells floors at about Rs 11,000 per sq ft — a gross yield of 6.5 to 8.7 per cent, unassured.

So a guaranteed 7 per cent sits in the lower half of what the open market pays. You are not being offered an above-market return with a safety net on it; you are being offered a roughly market return with a promise attached. That reframes the question completely: what is the promise worth, and what does it cost?

Where the guarantee is not published

M3M's own pages for this project — one for the retail, one for the offices — describe the space, the junction it sits on and the residential catchment around it. They do not advertise an assured or minimum return. The 7 per cent appears on broker material offering pre-leased units.

That is not proof the guarantee does not exist. Developers do sign such arrangements without publishing them. It does mean the claim is being made by the party selling you the unit rather than the party who would have to honour it, and that is exactly the situation where you ask for the document rather than the brochure.

The five questions that decide whether a guarantee is worth anything

1. Who is liable? If the developer tops the rent up to reach 7 per cent, that is a developer credit obligation, not a property yield. Your return is then only as good as their balance sheet. If instead there is a real tenant on a real lease at a real rent, the "guarantee" is just a description of the lease.
2. For how long? Assured-return periods are usually finite — two or three years is common. Ask what happens in year four, because that is when you find out what the unit actually lets for.
3. Is it priced in? A guarantee is not free. If the same floor without one would sell for less, you are pre-paying your own return out of the purchase price.
4. What happens on default? Get the remedy in writing. A promise with no consequence attached is a marketing line.
5. Who is the actual tenant, and on what lease? Tenant, rent, start date, lock-in, escalation, deposit — read against the bank statement showing the rent arriving. This is the only question whose answer cannot be spun.

The project, and the name on the registration

M3M Tee Point is a commercial colony at Sector 65, standing on about two acres at the junction of a 60-metre sector road and a 24-metre arterial road, with affluent residential neighbourhoods around it. Retail takes the ground and first floors and offices the second to the tenth, from about 500 sq ft. Published floor counts disagree — a ground-plus-ten structure on most readings, twenty-one floors across two towers on another — so take the floor and unit number from the conveyance rather than from a brochure.

The catchment is real and the competition is too. Roughly 15,000 flats and an expected 30,000 residents sit around the site, which is the argument for the retail and for the offices that serve it. But more than nine large commercial projects stand within 500 metres of the same junction, all of them selling the same story to the same catchment. That is the pressure a buyer inherits at re-letting, and it is the reason a lease with a real tenant already in place is worth more here than a promise about one.

One detail worth carrying into the paperwork: the project is registered with Haryana RERA as 349 of 2017, dated 9 November 2017, and the promoter of record is Marconi Infratech Pvt. Ltd. — not M3M itself. That is an ordinary structure and not a warning in itself, but it is the name that will appear on your agreement, and it is the entity whose obligations you would be relying on. M3M's own material invites verification on the Haryana RERA site, and you should take that invitation.

Frequently asked questions

What does office space cost in M3M Tee Point Sector 65?

About Rs 12,000 to Rs 14,000 per sq ft. Offices sit on the second to tenth floors and start at around 500 sq ft, with retail on the ground and first. That rate is consistent with the rent the area actually commands, which is not always true of commercial quotes in this corridor.

Is the 7 per cent assured return a good deal?

It is roughly a market return with a promise attached, not an above-market one. A Grade A building a few sectors away lets at Rs 60 to Rs 80 per sq ft a month and sells at about Rs 11,000 per sq ft, which is a gross yield of 6.5 to 8.7 per cent with no guarantee at all. So 7 per cent sits in the lower half of what this corridor pays unassured. The question is not whether 7 per cent is attractive but what the guarantee costs you and who stands behind it.

Does the arithmetic behind the rate hold up?

Yes. A 7 per cent return on Rs 12,000 per sq ft implies rent of Rs 840 a year, or about Rs 70 per sq ft a month; on Rs 14,000 it implies about Rs 82. Office space in a comparable Sector 65 tower is quoted at about Rs 70 to Rs 78 per sq ft a month, so the implied rent lands on the market rent. Nobody has inflated the capital rate to manufacture a headline yield.

Where does the 7 per cent claim come from?

Broker material offering pre-leased units here. Ask who advertises the 7 percent and the answer is always an agent, never the developer: M3M's own project pages, one for the retail and one for the offices, describe the space and the location but do not advertise an assured or minimum return. That is not proof no such arrangement exists, but it does mean the promise is being made by the party selling the unit rather than the party who would have to honour it — so ask for the document.

What should I check before relying on a guaranteed return?

Five things. Who is liable, because a developer topping up rent is a credit obligation rather than a property yield. How long the guarantee runs, since two or three years is common and year four is when you learn what the unit really lets for. Whether it is priced into the purchase. What the remedy is on default. And who the actual tenant is, on what lease — tenant, rent, start date, lock-in, escalation and deposit, read against the bank statement showing the rent arriving.

Who is the promoter, and what is the RERA number?

The project is registered with Haryana RERA as 349 of 2017, dated 9 November 2017, and the promoter of record is Marconi Infratech Pvt. Ltd. rather than M3M itself. That is an ordinary structure, but it is the name that will appear on your agreement and the entity whose obligations you would rely on. Verify the registration on the Haryana RERA site, which the developer's own material invites you to do.

Our view

This is one of the better-behaved numbers in the corridor: the rate and the rent agree, and the project is registered with the number and the promoter on the public record. That puts it ahead of most of what this batch has examined.

The assured return is where to slow down, and not because it is necessarily unsound. It is because 7 per cent is what this corridor pays anyway, so the guarantee is buying you certainty rather than income — and certainty is only worth what the guarantor is worth. Establish who that is, for how long, and at what cost in the purchase price. If the answer is a real tenant on a real lease, the guarantee is a description and the asset is fine. If the answer is a top-up from a promoter, you are holding their credit, not the market's rent.

In short: Rs 12,000 to Rs 14,000 per sq ft, an implied rent of Rs 70 to Rs 82 that matches the market, and a 7 per cent guarantee that the developer's own pages do not mention.

For the unassured yield this corridor actually pays, see Splendor Spectrum One in Sector 58 and Galaxy Magnum Tower. For the compressed-yield end of the market, Andaz Aerocity in Delhi.