Cognizant Renews Office Lease at Blackstone’s IT Park in Pune
Nasdaq-listed firm to pay annual rental of over .₹ 10 cr for 2.6 L sq ft space
Mumbai: The Indian arm of US-based Cognizant Technology Solutions has renewed the lease on its office space in the Blackstone Group-owned IT park in Pune, said two people familiar with the development. The deal is the first major office space transaction this year.
Following the renewal of the lease of 2.6 lakh square feet of office space, the Nasdaq-listed IT services and solutions company will pay a monthly rental of about .₹ 32/ sq. ft., taking the annual rental to over .₹ 10 crore. The company will pay 4 months’ rent as security deposit. Blackstone declined to comment on the deal and an email query from ET to Teaneck, New Jersey-based Cognizant remained unanswered until the time of going to press. “The deal was formalised and inked a couple of weeks ago. This office space has capacity to accommodate about 3,000 employees, given the usual practice of allocating 80-100 sq. ft. office space per employee,” said one of the people.
Cognizant has over fifty delivery centres worldwide and about 255,800 employees as of September 30, 2016. The global employee headcount stood at 221,700 at the end of 2015, including 162,500 in India, according to the annual report.
“As of December 31, 2015, we had outstanding fixed capital commitments of approximately $76.4 million related to our India real estate development programme to build new company-owned state-of-the-art IT development and delivery centres,” it said in the report.
The Quadron Business Park is located in the Rajiv Gandhi Infotech Park, which is the largest set-up of IT & ITeS companies in Pune. There are four buildings with a total of 1.9 million sq. ft. of office space spread over 25 acres in Pune’s Hinjewadi locality. The project was jointly developed by DLF and Hubtown, erstwhile Ackruti City, and was sold to Blackstone for .₹ 810 crore in 2011.
The growth of the information technology and IT-enabled services sector has been facing headwinds over the past few quarters. Nasscom, India’s software industry body, has trimmed the sector’s estimated growth to 8-10% in 2016-17 from 10-12% previously. The fallout of UK’s exit from the European Union and threat of protectionism in the key market of the US are among the factors that have resulted in lower growth expectation.
Absorption of commercial real estate in India is driven by IT/ITeS entities, with North American companies absorbing over 80% of the total for this sector. This share has been receding over the past few years as the banking, financial services and insurance sector has witnessed steady growth.