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| Avanta to wind up Mumbai operations |
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UK-based serviced office provider Avanta, which blocked properties at the peak of the realty boom in India and started offering office space to clients during the downturn, is in the process of shutting down its Mumbai operations after incurring significant losses. With the closure of the Mumbai operations, Avanta will be left with just one-fifth of its total 100,000 sq ft office space in India. "We are closing down our office in Bandra Kurla Complex (BKC) purely because it had become unviable. While our cost remained high as we had leased space at the top-end of the real estate boom in 2007, the rentals for workstations had fallen 60-70% in Mumbai," said Amit Bansal, Sales and Marketing Director. Avanta is shutting down its 50,000-sq ft office at BKC in Mumbai after landlord Wadhwa Developers refused to bring down lease rates. Bansal insists that Avanta is not exiting India for now and will search for joint venture partners in India to provide services from now on as it will reduce its capital requirement. Avanta, which initially had a target of opening 10 business centres, has invested $10-12 million in India so far and incurred a loss of Rs 20 crore in a little more than a year. The banks in England have now refused to release fund making it difficult for Avanta to absorb further losses, Bansal said. Serviced office space providers like Avanta lease space from developers, equip it with office facilities such as computer, phone, fax, internet connection and secretarial services and then give it away to companies for short term use ranging from three months to a year. Avanta is also in negotiations with the owners of another 32,000-sq ft building in Fort, Mumbai to reduce rentals so that it can cover its costs. "If the developers don't agree, we will have to close this centre as well," Bansal said. Avanta has over 1000 clients at its three centres including one in the Statesman House in New Delhi, which is 70% occupied. Fort building is occupied 62%, while BKC office has 92% occupation. "We successfully renegotiated rentals with over 110 property owners at the Statesman House," Bansal said, adding that new rentals are down 25% on average. - Agencies Related Articles:
Last update: 22-10-2009 19:36
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