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The BK Birla group could earn about Rs 125 crore annually through lease of its office buildings in central Mumbai. On Thursday, the company announced its foray into the real estate sector through the new company Birla Estates.

In newspaper advertisements, the company said it would lease out two of its commercial properties — Birla Centurion and Birla Aurora in Worli. Birla Centurion is a part of a 300-acre land parcel, owned by Century Mills. The area of the project is 350,000 sq ft project. The mill which stood on the site earlier has shifted operations to Gujarat.

Birla Aurora is adjacent to the monumental Century Bhavan in Worli. The total area of the project is 265,000 sq ft. Century Bhavan itself has tenants such as Croma, Godrej Nature’s Basket and Starbucks. “Around Rs 175 per sq ft is the fair value given the ongoing rents in the area,” said Ashok Kumar, the managing director of Gennex Partners, a commercial realty services firm. A mail sent to the BK Birla group did not elicit any response.

Birla Estates was carved out by the Century Textiles board early this year to develop its properties in and around Mumbai under a new chief executive officer. While B K Birla is the chairman of Century Mills, his grandson Kumar Mangalam Birla is the vice-chairman of the company. As the senior Birla is unwell, the junior Birla chairs meetings.

The group has other companies like Kesoram Industries, Mangalam Cement, Century Textiles, and Century Enka.

The group has other companies like Kesoram Industries, Mangalam Cement, Century Textiles, and Century Enka.

Sources said the group spent Rs 2,500 crore to develop Birla Centurion and Birla Aurora. US-based entertainment and leisure brand Playboy has opened a lounge bar in the first property.

“We were not in a hurry. Our focus was on completion of the project and then leasing it out,” said a source in the group.

The Birlas seem to have timed their entry into the sector well. Leasing activity across Mumbai’s mico-markets have picked up. The quarter-on-quarter rise for the July-September quarter this year was 54 per cent.

According to Colliers International, the gross leasing volume recorded in the quarter was 1.09 million sq ft.

However, about 53 per cent of this demand was concentrated in the western suburbs, followed by the Bandra-Kurla Complex (19 per cent) and Navi Mumbai (16 per cent). Nariman Point and surrounding areas — the central suburbs, Central Mumbai and Thane — got only 12 per cent of the total demand.

“Capital and rental values have not shown any significant changes and remained stable in this quarter as well. However, reduced vacancy in certain micro markets is putting an upward pressure on rents,” said the Colliers report.