MPD Tower Office for Sale, Golf Course Road Gurgaon

MPD Tower is a 2006 office building on Golf Course Road in Sector 43, Gurugram, on the DLF Phase 5 boundary and about 330 m from the Sector 42-43 Rapid Metro station. Offices in it change hands with tenants in place. The two pre-leased offices found are priced at about Rs 15,800 to Rs 16,300 per sq ft, worked out from the rent and return each listing prints. The row this page replaces printed a band of about Rs 25k to 30k per sq ft. Nothing found supports that: at this building's rent it would mean a 4 to 5 per cent yield, and no listing here is priced below 6.

The building

• Two basements, ground and eight floors, on a plate of about 11,902 sq ft.
• About 1,07,123 sq ft in all. Nine levels x 11,902 = 1,07,118, five square feet from the published figure, so the two agree. One site's 26,600 sq ft total is barely two floors and is almost certainly an available-area figure in the wrong field.
• Built in 2006; strata-sold, so owners are mostly investors.
• About 330 m to the Sector 42-43 Rapid Metro.
• A coworking operator runs a centre in the building and serviced offices are listed on the second floor.
• No developer could be found. The row gave "MPD", and searches for it return unrelated companies abroad.

What the pre-leased offices are priced at

Neither listing prints a rupee price. Both print the rent and the return the seller wants, and that is enough to work the price out.

The working for the first: Rs 12,22,460 x 12 = Rs 1,46,69,520 a year; divided by 0.07 that is Rs 20,95,64,571; divided by 12,868 sq ft, Rs 16,286. For the second: Rs 5,08,286 x 12 = Rs 60,99,432; divided by 0.06, Rs 10,16,57,200; divided by 6,434, Rs 15,800.

Two oddities a buyer should raise. First, 6,434 is exactly half of 12,868, which suggests both come from the same block of space, split or re-let, and a buyer should ask whether the two listings overlap. Second, a 12,868 sq ft office is larger than the building's 11,902 sq ft floor plate (about 8 per cent larger), so it either spans two floors or its area is a super area with a large loading. Ask for the carpet area and the floor numbers in writing.

The rent, and what it means for the yield

Vacant space in the building lets at Rs 100 and Rs 105 per sq ft a month on the leasing listings; one broker's Rs 200 is double what the sector supports and is most likely a serviced rate. The details are on the MPD Tower rent page.

• The Samsung office is let at Rs 95, a little under the market, with a nine-year lease, a three-year lock-in, six months' security and 15 per cent escalation after three years. After the step-up, rent is about Rs 109 and the gross yield on Rs 16,286 is about 8 per cent. That is a good lease on paper, provided the lock-in holds.
• The 6,434 sq ft office is let at Rs 79, well under Rs 100. At Rs 15,800 that is 6 per cent now; re-let at Rs 100 it would be about 7.6 per cent. The risk is the other way too: if the tenant leaves after its three-year lock-in, the buyer faces a vacancy and a fit-out.
• The old band: at Rs 100 rent, Rs 25,000 per sq ft yields 4.8 per cent and Rs 30,000 yields 4.0 per cent. A buyer paying that would be accepting a return below a bank deposit on a 2006 building.

All of these are gross. Maintenance, if the owner pays any, property tax and vacancy between tenants come off. No maintenance figure is published for this building.

How it compares on Golf Course Road

MPD Tower prices at the bottom of the group, level with Vipul Square in the same sector. A portal gives Golf Course Road offices a range of Rs 12,000 to Rs 25,000 per sq ft; the top of that belongs to newer towers, not to a 2006 building with small plates. The low price is a fair reflection of age and of the unusually large lot sizes (a buyer here needs Rs 10 crore or more), offset by the best metro access on the road. More let offices are on the pre-leased property page and the road as a whole on the Golf Course Road office page.

Who this suits

An investor with Rs 10 crore to Rs 21 crore who wants a single let office near the Rapid Metro at a 6 to 7 per cent gross yield, with a named tenant and a written escalation. It does not suit a buyer looking for a small unit (none under about 6,400 sq ft was found for sale), one who expects a newer building, or one who would pay the old band's prices.

Before you pay anything

1. The lease: tenant, rent, start date, lock-in, escalation and the security deposit, and whether the deposit transfers to you.
2. The area: carpet and super, and the floors the unit is on, given that 12,868 sq ft exceeds a floor.
3. Overlap: whether the 6,434 and 12,868 sq ft listings are the same space.
4. Title: a registered conveyance deed in the seller's name, and a charge search.
5. The occupation certificate for the building.
6. Costs: stamp duty in Gurugram is 7 per cent for a man, 5 per cent for a woman and 6 per cent jointly, plus registration, and the buyer deducts 1 per cent TDS on the price.
7. The arithmetic: rent x 12 over price, after maintenance and tax.

Frequently asked questions

What is the price of office space in MPD Tower, Golf Course Road?

About Rs 15,800 to Rs 16,300 per sq ft, on the two pre-leased offices found. Neither listing prints a rupee price; both print the rent and the return, and dividing gives the price: a 12,868 sq ft office let at Rs 12,22,460 a month at 7 per cent is about Rs 20.96 crore, and a 6,434 sq ft office let at Rs 5,08,286 at 6 per cent is about Rs 10.17 crore.

What rent does an office in MPD Tower earn?

Rs 100 to Rs 105 per sq ft a month on the vacant space let in the building. The two pre-leased offices for sale are let for less: Rs 95 (Samsung, 12,868 sq ft) and Rs 79 (a multinational, 6,434 sq ft). One broker quotes Rs 200, which nothing else in Sector 43 supports.

What is the rental yield on MPD Tower offices?

The listings are priced at 6 to 7 per cent gross, the ROI each seller prints. The Samsung lease carries 15 per cent escalation after three years, which lifts its rent to about Rs 109 and the yield to about 8 per cent on the same price. The 6,434 sq ft office's Rs 79 rent is well below the building's Rs 100, so its yield would rise to about 7.6 per cent if re-let at market.

Is the old price of Rs 25,000 to Rs 30,000 per sq ft right?

Nothing found supports it. At the building's Rs 100 to Rs 105 rent, Rs 25,000 a sq ft would yield about 4.8 to 5 per cent and Rs 30,000 about 4 per cent, well under the 6 to 7 per cent the actual listings are priced at. Every pre-leased Sector 43 and Sector 54 office this site covers sells for Rs 15,500 to Rs 20,000.

How big is MPD Tower, and when was it built?

Built in 2006, with two basements, ground and eight floors on a plate of about 11,902 sq ft, about 1,07,123 sq ft in all. Nine levels x 11,902 is 1,07,118, five square feet from the published total. A 26,600 sq ft total on one site fails that arithmetic.

How far is MPD Tower from the metro?

About 330 m from the Sector 42-43 Rapid Metro station, the closest rail link of any Golf Course Road office building this site covers.

Who is the developer of MPD Tower, and is it RERA registered?

No developer or builder could be established; searches for an MPD group return unrelated companies abroad. The building was finished in 2006, a decade before Haryana began registering projects, so no RERA number applies. A buyer relies on the conveyance deed, the occupation certificate and the lease.