Salcon Rasvilas Office for Sale, Saket New Delhi

Salcon Rasvilas is a finished Grade A office building in Saket District Centre, South Delhi, completed in 2007, within about 1 km of Malviya Nagar metro, with about 2,44,998 sq ft on floors of about 35,000 sq ft. Its tenants are largely Japanese trading and engineering houses, Mitsui, Marubeni-Itochu Steel, Kobelco and IHI among them, plus Oracle India. The row this page replaces printed a band of about Rs 30,000 to Rs 40,000 per sq ft. No listing prints a price per sq ft for the building, so this page works the value out from the rents and the one price that is published.

The answer is about Rs 25,000 to Rs 36,000 per sq ft for a let office, at a gross yield of 6.5 to 7 per cent. The old top of Rs 40,000 would need a rent the building has not been quoted.

What is for sale

A broker lists let offices of 2,100, 3,500, 5,000, 7,500, 10,000 and 18,500 sq ft, rented to multinational companies, starting from Rs 12.5 crore. A second broker offers a pre-leased office in the building without a readable price, and a portal page ranks for the building's resale price list without one either. That is the whole of the sale evidence.

The Rs 12.5 crore is only useful once it is divided, and the answer depends on which unit it belongs to:

So the "starting from" price almost certainly does not belong to the smallest unit. Ask which unit it is for and what that unit's tenant pays before reading anything into it.

What the rent says the building is worth

Saket's let offices change hands on the lease, at a yield buyers accept of about 6.5 to 7 per cent, which is the range this site's DLF South Court sale page works from. The one rent found for Rasvilas is Rs 195 per sq ft a month, a coworking page's quote for premium space; Saket's published Grade A band is Rs 90 to Rs 175, and neighbours let at Rs 125 to Rs 180. Value per sq ft is rent times twelve divided by the yield:

That gives about Rs 25,700 to Rs 36,000, and it agrees with the two plausible readings of the Rs 12.5 crore, Rs 25,000 and Rs 35,714. The top of the old band, Rs 40,000, would need a rent of Rs 40,000 x 0.065 / 12 = Rs 217 a month to yield 6.5 per cent. Nothing in Saket is quoted there. At the Rs 195 that is quoted, Rs 40,000 yields 5.85 per cent gross.

What comes off the yield

Delhi stamp duty is 6 per cent for a man, 4 per cent for a woman and 5 per cent jointly, plus a 1 per cent registration fee. On a Rs 12.5 crore purchase by a man, that is Rs 87.5 lakh on top, and a 6.5 per cent gross yield becomes 6.5 / 1.07 = about 6.1 per cent on the money paid. Maintenance is usually the tenant's, but an empty unit's owner pays it; Rasvilas's rate is not published, and DLF South Court's common-area charge on one listing is Rs 25 a month, which on 3,500 sq ft is Rs 10.5 lakh a year of vacancy cost.

The building

• Size: about 2,44,998 sq ft on floors of about 35,000 sq ft. 2,44,998 over 35,000 is 7.0, which fits one source's lower ground, ground and five floors. Another source says six floors over three basement levels; the basement count could not be settled.
• Age: completed in 2007, described as Grade A.
• Metro: Malviya Nagar, Yellow Line, within about 1 km.
• Tenants: Mitsui, Marubeni-Itochu Steel, Kobelco, IHI, SMCC, Kaneka, Oracle India, Altair, Statkraft, ASK Wealth and Trammo, on an undated list.
• Developer: the Salcon Group of Vinod Saluja, builder of Salcon Aurum in Jasola and Platina Tower on MG Road, Gurugram. No company website surfaced.

A tenant list like this is the main attraction for an investor. Large corporate tenants are what make a let office sellable later; the risk is concentration, because several of them are in the same trades and could move together. Read the specific lease on the unit you buy, not the building's list.

How it compares

In Saket, DLF South Court is valued at about Rs 24,900 to Rs 33,200 on the same yield method, and ABW Rectangle One lets at Rs 125 to Rs 170, which values it lower. In Jasola, DLF Towers asks about Rs 22,000 at a Rs 110 rent. The Saket premium over Jasola, about Rs 3,000 to Rs 14,000 per sq ft, is the rent gap capitalised, not a separate fashion.

Who this suits, and who should look elsewhere

As an investment, it suits an investor with Rs 12 crore or more who wants a let Saket office with a multinational tenant and accepts about 6 per cent after stamp duty. It does not suit a buyer with under Rs 10 crore, since the smallest unit on offer is 2,100 sq ft, or one who wants a yield above 7 per cent. More let stock is on the pre-leased property page.

Before you pay anything

1. Which unit the price is for, and its carpet and super area.
2. The lease: tenant, rent, lock-in, escalation, expiry and the deposit that transfers.
3. The title: the seller's registered deed, the land tenure of the district-centre plot, and a charge search.
4. Maintenance: the rate and any arrears.
5. The arithmetic: rent times twelve over price plus stamp duty.

Looking to lease rather than buy? The Salcon Rasvilas rent page covers asking rents, maintenance, deposits and lock-ins in the building.

Frequently asked questions

What is the price of office space in Salcon Rasvilas, Saket?

About Rs 25,000 to Rs 36,000 per sq ft, worked out from rents because no listing prints a price per sq ft. A broker offers let units from Rs 12.5 crore; on the 3,500 sq ft unit that is Rs 35,714 per sq ft and on 5,000 sq ft Rs 25,000. At Saket rents of Rs 150 to Rs 195 and a 6.5 to 7 per cent yield, the value is Rs 25,700 to Rs 36,000.

Are there pre-leased offices for sale in Salcon Rasvilas?

Yes. A broker lists let offices of 2,100, 3,500, 5,000, 7,500, 10,000 and 18,500 sq ft, rented to multinational companies, starting from Rs 12.5 crore. The rents and lease terms are not printed; ask for the lease deed before an offer.

What rental yield does an office in Salcon Rasvilas give?

At Rs 195 a month on Rs 36,000 per sq ft, 6.5 per cent gross; at Rs 175 on Rs 30,000, 7 per cent. Paying the old top of Rs 40,000 at Rs 195 would give 5.85 per cent. Delhi stamp duty of 6 per cent for a man plus 1 per cent registration takes about 0.4 of a point off.

Why does the Rs 12.5 crore starting price matter?

It tells you which units it can belong to. On 2,100 sq ft it would be Rs 59,524 per sq ft, which no Saket office fetches. On 3,500 sq ft it is Rs 35,714, the top of the market, and on 5,000 sq ft Rs 25,000, the bottom. Ask the broker which unit the figure is for before reading anything into it.

When was Salcon Rasvilas built, and how big is it?

It was completed in 2007. It has about 2,44,998 sq ft on floors of about 35,000 sq ft, seven office levels counting lower ground and ground. It predates the real estate regulator, so no registration number applies.

Who are the tenants in Salcon Rasvilas?

Tenants named on a listing include Mitsui and Company India, Marubeni-Itochu Steel India, Kobelco Construction Machinery, IHI Corporation, SMCC Construction India, Kaneka India, Oracle India, Altair Engineering India, Statkraft Solar Solutions, ASK Wealth Advisors and Trammo India.

How does Salcon Rasvilas compare with DLF South Court for an investor?

They price the same way, off the lease. DLF South Court's let floors are valued at about Rs 24,900 to Rs 33,200 per sq ft at a 6.5 to 7 per cent yield. Rasvilas's range runs a little higher at the top because its one rent quote, Rs 195, is above South Court's Rs 180.