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

The Economic Times - - Companies: Pursuit Of Profit - Kailash.Babar@ times­

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.

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