GLOBAL TECH FIRMS INK LARGE LEASING DEALS IN BENGALURU

Global tech firms — from IBM to Cognizant — have signed big office leasing deals in Bengaluru recently.

Us-based tech giant IBM has leased 721,000 sq. ft in three wings of Embassy Golf Link Business Park in Bengaluru. IBM already has a space in the 4.5-million sq. ft business park, which is located at Intermediate Ring Road in Bengaluru.

The lease deal has a tenure of five years and IBM will pay a rent of ~75 per sq ft or ~65 crore per year, according to the sources in the know. IBM could open a development centre on that space, sources said.

According to recent reports, IBM has also applied for a 280,000 sq. ft space at Madhapur in Hyderabad in operational special economic zone. IBM has offices in Bengaluru, Gurugram, Chennai, Kolkata, Hyderabad, Mumbai among others.

IBM did not respond to the mails on the subject. Embassy Office Parks REIT did not comment on the subject.

Another tech firm Cognizant has leased 2.1million sq. ft across two properties in Manyata Embassy Business Park in Bengaluru recently, sources said. The lease deal is for five years and Cognizant will pay a rent of ~56 per sq. ft or annual rent of ~144 crore.

Cognizant has global delivery centers in Mumbai, Bangalore, Chennai, Coimbatore, Gurgaon, Hyderabad, Kochi, Kolkata and Pune. Recently, it leased 350,000 sq. ft in DLF’S infotech park in Rajarhat area of Kolkata, reports said recently.

E-mails sent to Cognizant did not elicit any response.

US tech firm Oracle has leased 44,3070 sq. ft i n Kalyani Magnum in Bengaluru at ~61 per sq. ft, sources said. According to a recent report by property consultancy CBRE, gross leasing activity grew by over 25 per cent to touch a historic high of about 61.6 million sq ft in 2019.

Bengaluru dominated office leasing on an annual basis, followed by Hyderabad, Delhi NCR, and Mumbai. Together, the cities accounted for about 75 per cent of overall take-up.

In 2019, the share of the tech sector in overall space take-up rose to about 40 per cent, from about a third in 2018. Overall, space take-up by such firms rose by over 45 per cent on an annual basis. This growth was primarily driven by global multinationals, which accounted for over 70 per cent of the overall space take-up by tech firms this year. The share of research, consulting & analytics firms increased to 5 per cent in 2019 from 4 per cent in 2018.

“The Bengaluru office market has been witnessing a steady growth over past two decades, which is adequately reflected in the jobs space, rental growth in prime office markets. Bengaluru has seen continued growth in leasing activities, because of competitive pricing offered as against its counterparts in New Delhi, Pune, and Mumbai,” said Ashok Kumar, managing director & CEO at Gennex Partners.

Kumar said multinationals continued to expand robustly because of availability of right talent pool and new office assets at comparatively low rents.