Societe Generale renews lease for 3.23 lakh sq ft office space for five years in Bengaluru

The Bengaluru skyline.

Societe Generale Global Solution Centre Pvt Ltd has renewed its lease for 3.23 lakh sq ft of office space for around five years at the Information Technology Park Ltd (owned by Ascendas) in Bengaluru, documents accessed by Propstack showed.

The company, whose registered office is on the tenth floor of the Voyager Builder, Ascendas ITPB SEZ, in Whitefield Road, Bengaluru has renewed its lease for multiple floors 2, 6, 7, 8, GF,10, 11, 12, and 13 in the buildings named Victor and Voyager for 64 months, the documents showed.

The transaction was registered in November 2021.

The rent is Rs 56.50 per sq ft per month. As per the escalation clause in the agreement, the rent will be increased by 4 percent after completion of every 12 months. The company has deposited an interest free refundable security deposit of Rs 14 crore, the documents showed.

“This transaction is yet another indicator of strong comeback by BFSI sector. We believe that with the new hybrid and remote work culture, India and particularly South India will continue to have an advantage,” said Raja Seetharaman, co-founder, Propstack.

There was no response from the tenant.

Societe Generale Global Solution Centre (SGGSC), a 100 percent-owned subsidiary of the French financial services giant Societe Generale, provides services in the areas of application development and maintenance, infrastructure management, business process management, research and middle office, and knowledge process management to Societe Generale's business lines around the world.

“We have noticed a rising trend of Global Captive Centres (GCCs) and BFSI companies expanding in India and specifically in Bengaluru to take advantage of the availability of a vast skilled talent pool as well as sub-dollar office rentals," said Prashant Thakur, senior director and head - Research,  ANAROCK Group.

The third wave seems to have a limited and time-bound impact (as it is less severe as per initial assessments) on the business including commercial office leasing and the cities may not go under lockdown this time. As a result, the momentum for commercial office leasing/renewals will continue once the wave subsides, he said.

Moreover, BFSI companies have to be cognizant of data security and so remote working does not seem to be an effective long-term solution.

In terms of rent, considering the SGGSC’s existing presence and repute, the deal seems to have been concluded at around a 4-5 percent discount from the ongoing market rates based on deals concluded during the past couple of years, he added.

ITPL is a well-managed good quality Grade A commercial office asset in Bengaluru and so the demand is always high for this property.

Overall office gross absorption across the top six cities was at about 33 million square feet (sq ft) last year, 10 percent higher than 2020, a report by property consultant Colliers said.

On a city level, all regions except Bengaluru and Delhi-NCR surpassed the annual average absorption of 2016-2018. Hyderabad had seen strong recovery gains in 2020 and maintained its streak in 2021. It was followed by Chennai and Mumbai which gained significant scale during the year, attributable to a strong fourth quarter building on the momentum of the previous quarter, the report said.

Submarkets such as NCR’s MG Road, Mumbai BKC and Bengaluru’s SBD and Whitefield saw higher occupancy quarter on quarter after a gap of at least six quarters.