Nykaa leases 27,000 sq ft office space for 5 years in Mumbai

Nykaa, the widely known name for Falguni Nayar-promoted FSN E-Commerce Ventures, has leased 27,000 sq ft of office space in Prabhadevi in south Mumbai for at least Rs 65 lakh a month for five years, documents accessed by CRE Matrix, a real estate data analytics firm, show.

Nykaa e-Retail has leased Unit A on the sixth floor in Cynergy IT Park, Appasaheb Marathe Marg, Prabhadevi. The monthly rent for the first three years will be Rs 65,92,104 and will increase to Rs 75,80,920 in the fourth and fifth years.

“With Indian unicorns such as Nykaa, Bjyu's leasing large office spaces, our confidence in the commercial real segment continues to rise with every new deal. We foresee commercial segment witnessing increased interest as Indian startup story picks momentum,” said Abhishek Kiran Gupta, CEO and co-founder, CRE Matrix.

Nykaa was yet to respond to Moneycontrol's queries on the lease.

The Falguni Nayar-promoted company, which raised Rs 5,351.92 crore through a highly successful IPO in 2021, paid a security  deposit of ₹ 1.97 crore. The documents were registered on February 10, 2022.

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The office space comes with 27 car parkings.

After two years of the pandemic, Indians are not only actively engaging in revenge shopping and holidays but also planning to return to office, Gupta said.

Work-from-office would be back soon but with some modifications. Grade A projects with handsome occupancy levels may consider increasing the rentals to test demand elasticity in prime locations, he said.

“We firmly believe co-working and flex spaces operators will attract large interests from occupiers,” Gupta said.

Nykaa has been operating from the building for seven years. While it took up space at Rs 160 per sq ft a month at that time, the new deal has been finalised at Rs 243 a sq ft per month, which is close to what the other tenants in the building have been paying, he said.

It confirms that commercial market is favouring the occupiers now, with the pressure on rentals. If such deals gain momentum, the pendulum could move towards landlords in 12 to 18 months, he said.

FSN E-Commerce Ventures recently reported a weak set of numbers for the quarter ended December. Nykaa’s consolidated net profit tanked 59.5 percent on-year to Rs 27.9 crore, however, consolidated revenue jumped 36 percent on-year to Rs 1,098 crore.

The company’s margin performance was disappointing, as it shrank 6.3 percent from 13.2 percent a year ago as marketing expenses skyrocketed.

The e-commerce company’s other expenses, which includes marketing costs, surged 107 percent on-year to Rs 324 crore, with the fashion segment pumping in funds on branding.