Not all is gloom and doom in the commercial real estate market. Big technology companies have resumed discussions about leasing office spaces, discussions that were put on hold following the outbreak of coronavirus earlier this year.
Microsoft and Intel are looking to lease about 1.3 million and 1 million sqft respectively in Bengaluru, people familiar with the matter said. “They have given the go-ahead that they will not stop their expansion plans,” one of the people mentioned above said. If those close, it will be a relief for builders. But the market this year is unlikely to touch the heights of last year, when 60 million sqft of office space was leased.
Microsoft occupies about 0.5 million sqft with Prestige Estates. Intel has a big campus of its own, in addition to some leased property.
Both the companies did not respond to requests for comment. Embassy, RMZ, Bagmane and Prestige are the builders who are in the fray to house Microsoft.
This comes at a time when companies like Oyo, Ola, Swiggy, Zomato and Uber have reached out to builders to renegotiate pan-India rental agreements, renewal clauses and rent escalations. All these companies have laid off thousands due to the difficult business environment, and have given up about 10% of their real estate space.
Industry executives said that proposals totaling about 5 million sqft are in the market. While discussions have been slow, companies have not backed off. Tax and consulting company EY is looking to lease 3 million sqft. Property developer RMZ closed deals totaling 1.6 million sqft across Bengaluru, Hyderabad and Chennai during the lockdown.
Paytm has also signed a new office deal to consolidate its workforce in Delhi-NCR by taking up 0.5 million sqft, besides another 0.1 million sqft in Bengaluru to house its ecommerce business, TOI reported on Thursday.
June 26, 2020