Suncity Trade Tower Office for Sale, Sector 21 Gurgaon

Office space for sale in Suncity Trade Tower Sector 21 Gurgaon is quoted on request, which is another way of saying the price depends entirely on who is in the floor. On a building this small that is not evasion — it is the truth.

The building lets at three rates: about Rs 45 per sq ft a month bare shell, about Rs 65 furnished, and about Rs 78 on a pre-let floor with a bank as tenant. Capitalise each at a Sector 21 yield of 7 to 8 per cent and you get three different assets, not one.

Three floors, three prices

The Rs 9,000 to Rs 13,000 per sq ft band usually quoted for this building is those three cases collapsed into one number, and collapsing them is what makes it useless. A vacant bare-shell floor priced at Rs 13,000 is a bad purchase; a bank-let floor at Rs 9,000 would be an excellent one. Same building, same band, opposite answers.

Why the tenant is most of the value

This is a building of two basements, ground and four floors, let in units of roughly 1,500 to 3,500 sq ft. On a floor that size one departing tenant is the whole income. There is no diversification inside the asset, so the covenant does the work that a multi-tenant campus does elsewhere.

A bank at Rs 78 per sq ft is the strongest thing on the rent roll here, and not only because of the rate. A bank's premises team applies a checklist — power redundancy, security, access control, a landlord who answers — that most small tenants never run. A floor that has passed it, with term remaining, deserves the tight end of the yield range. A vacant bare-shell floor on a road with no rail deserves the wide end and a void on top.

What the extra yield is paying for

Seven to eight per cent here against 6.5 to 7 on Golf Course Road. The extra point is the address, and it is worth being specific about what that means: no metro on the Old Delhi-Gurgaon Road, a secondary road rather than an arterial one, and a tenant pool drawn largely from firms that cannot afford Udyog Vihar across the street. None of that is fatal — the building is full enough to have a bank in it — but it is why a buyer is paid more here.

Against the alternatives

This is the smallest commercial ticket on the site: about Rs 2 crore buys a whole 1,500 sq ft unit with a tenant in it. That is the genuine attraction, and it is a real one for a buyer who wants a let commercial floor rather than a share of one.

Five documents before you agree a price

1. The lease deed and the tenant's name. On a single-tenant floor this is the asset.
2. The passing rent per sq ft, and whether the floor is let bare or furnished. Rs 45 and Rs 78 value the same floor 70 per cent apart.
3. The escalation clause and the lock-in remaining. Four years of term is a different purchase from eight months.
4. The security deposit held. It transfers on sale and is real money in the settlement.
5. The maintenance dues on the unit. Arrears attach to the unit, and you inherit them.

The costs on top

Stamp duty in Gurugram is 7 per cent for a male buyer inside municipal limits, 5 per cent for a female buyer and 6 per cent for joint buyers, plus a slab registration fee that reaches its Rs 50,000 cap from Rs 90 lakh, charged on the higher of your agreement value and the commercial collector rate. On a Rs 2.5 crore floor that is about Rs 18 lakh. GST is nil on a completed property holding its completion certificate. Pull the current commercial collector rate for Sector 21 before you negotiate.

Our view

Buy a tenant, not a building. The Rs 9,000 to Rs 13,000 band that circulates for this address is meaningless on its own, because the three rents in this building value the same floor between about Rs 6,750 and Rs 13,400 per sq ft. Establish which of the three you are being sold, apply 7 per cent if the covenant is strong and 8 if it is not, and walk away from any quote that will not tell you the tenant's name.

In short: Three rents, three prices, one band that hides all of it. The lease deed answers the question; nothing else does.

Frequently asked questions

What does office space cost to buy in Suncity Trade Tower Sector 21 Gurgaon?

Sale prices here are quoted on request, so work them out from the rent. The building lets at Rs 45 bare shell, Rs 65 furnished and Rs 78 on a pre-let floor with a bank as tenant. At a 7 to 8 per cent yield those give roughly Rs 6,750 to Rs 7,700 per sq ft for bare-shell income, Rs 9,750 to Rs 11,100 for furnished, and Rs 11,700 to Rs 13,400 for the bank-let floor. The Rs 9,000 to Rs 13,000 band often quoted for this building is those three cases collapsed into one number.

Why does the tenant matter so much here?

Because on a building this small the covenant is most of the value. A pre-rented floor with a bank at Rs 78 per sq ft and one let to a start-up at Rs 45 are not the same asset even on the same floor plate, and the yield a buyer should apply to them is not the same either. A bank-let floor deserves the tight end of the range; a vacant bare-shell floor on a road with no rail deserves the wide end, plus a void.

What yield should I use?

Seven to eight per cent for a let floor here, against 6.5 to 7 on Golf Course Road — that is what a good yield looks like at this end of the market. The extra point is paying for the address: no metro, a secondary road, and a tenant pool drawn mostly from the small firms that cannot afford Udyog Vihar. On a vacant floor, underwrite the void first and the yield second.

How does it compare with the other Gurgaon options?

It is the cheapest entry of the lot. A bank-let floor here at Rs 11,700 to Rs 13,400 per sq ft sits between Sohna Road strata at Rs 7,100 to Rs 8,800 and MG Road at Rs 15,000 to Rs 16,000, and well under Golf Course Road at Rs 18,200 to Rs 24,000. On a 2,000 sq ft unit the entry is a little over Rs 2 crore, which is the smallest commercial ticket on this site.

What should I ask for before agreeing a price?

On a pre-leased purchase: the lease deed and the tenant's name, the passing rent per sq ft, whether the floor is let bare or furnished, the escalation clause, the lock-in remaining, the security deposit held and the maintenance dues on the unit. On a small floor in a small building one departing tenant is the whole income, so the covenant and the remaining term are the purchase.

What are the transaction costs?

Stamp duty of 7 per cent for a male buyer inside municipal limits, 5 per cent for a female buyer and 6 per cent joint, plus a slab registration fee that reaches its Rs 50,000 cap from Rs 90 lakh, charged on the higher of the agreement value and the commercial collector rate. On a Rs 2.5 crore floor that is about Rs 18 lakh. GST is nil on a completed property holding its completion certificate.