Mumbai real estate: Amitabh Bachchan rents out commercial space for annual rental of Rs 2.07 cr

Mumbai real estate update: The major reason for this trend of Bollywood stars investing in commercial real estate is the annual rental yield compared to residential real estate is because commercial assets have higher rental yield than residential properties, according to experts.

Bollywood actor Amitabh Bachchan has rented out four commercial units measuring around 10,000 sqft in the Oshiwara area of Mumbai for a yearly rent of Rs 2.07 crore and a security deposit of Rs 1.03 crore. The commercial space has been rented to Warner Music India Limited for five years. The annual rental starting the fourth year will increase to Rs 2.38 crore, according to documents accessed by Propstack.com

Bachchan had purchased the above four office spaces in Oshiwara in August 2023. The four units were purchased by Bachchan for Rs 7.18 crore each.

Along with Bachchan, Kartik Aryan, Manoj Bajpayee and Sarah Ali Khan also have purchased office spaces in Mumbai reaffirming the trend of several Bollywood stars investing in commercial properties instead of residential ones for better rental yield.

The deal

Bachchan has rented the four units with a lock-in period of three years and 12 parking lots. The stamp duty paid for the deal is Rs 2.88 lakh and the same was paid on November 30, 2023, according to the documents. The commencement date of the transaction is from March 2024.

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Mehul R Thakkar

Special Correspondent|Moneycontrol

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An email query has been sent to Warner Music India Limited. Their reply is awaited. However, Bachchan could not be reached for a comment

The major reason for this trend of Bollywood stars investing in commercial real estate is the annual rental yield compared to residential real estate. Commercial assets have a higher rental yield than residential properties, according to experts. Commercial properties like offices, retail, and warehouses usually have gross yields in the range of 6-10 percent in metro cities, according to CBRE India, a real estate consultancy firm.

Also read: Why Bollywood stars prefer investing in commercial properties and not residential apartments in Mumbai

What is rental yield?

Rental yield is the amount the property owner receives annually by renting out a property. For example, if one purchases a property worth Rs 1 crore in Mumbai and earns an annual rent of Rs 8 lakh, the rental yield for the property owner is 8 percent.

In the past, Bollywood actor Salman Khan leased out 27,650 square feet (sq ft) of space spread over four floors to TNSI Retail Private Limited, a subsidiary of Future Retail Limited, in Mumbai, at a rent of around Rs 89.6 lakh per month in 2022.

Also read: Amitabh Bachchan, Kartik Aryan and Sarah Ali Khan buy commercial properties in Andheri, Mumbai

In 2021, director Karan Johar leased out two commercial properties owned by him in the name of Dharma Productions for a rent of Rs 17.56 lakh and Rs 6.15 lakh per month.