Despite global headwinds such as volatile geopolitical situations and growing economic uncertainty, Bengaluru saw increased activity in commercial real estate in 2023.
By the end of the second quarter of calendar year 2023, the office sector started bouncing back with renewed leasing transactions and fresh inventories. The net absorption of commercial real estate during January-September 2023 in India stood at 26 million square feet – which is 68 percent of the 2022 full-year number, reports suggest.
Experts say the office supply completions across the top seven cities in India will touch 165 million sq ft between 2023 and 2025 while Bengaluru will lead the supply with 29 percent of the total share in India.
Here are the top five office transactions that stood out in Bengaluru in 2023:
Google leased over 29 lakh sq ft over six deals
Of the six transactions, five were signed by Google India Private Ltd and Google Connect Services India with Bagmane Developers, while the sixth one was with managed workplace provider Table Space, revealed the registration documents accessed by Moneycontrol.
The deal came at a time after Google's parent company Alphabet decided to lay off 12,000 employees in its second round of job cuts in early 2023 in the wake of market uncertainties.
Morgan Stanley leased 1.36 lakh sq ft office space
Morgan Stanley renewed the lease for the second, third and fourth floors in Ecoworld on Outer Ring Road, Sarjapur, Bengaluru. The building is owned by Artiga Ecoworld Infrastructure Private Ltd and Morgan Stanley paid a security deposit of Rs 9.4 crore.
The property is notified as a special economic zone. The chargeable area is 1.36 lakh sq ft and the rent works out to Rs 116 per sq ft.
Qualcomm India leased 6.21 lakh sq ft
Bengaluru-based Bagmane Developers leased the space for nine years in a building named Bagmane Capital-Ankor in Bengaluru for a monthly rent of Rs 5.90 crore.
The deal covered ground plus 12 floors and the lease period for 9 years commenced in April 2024.
Amazon Development Centre leased 6.6 lakh sq ft
The office is located in Constellation Business Park-Taurus II, a development by Bagmane Developers with a rent of Rs 72.74 per sq ft per month. The facility houses several tech companies.
The lease for the ground floor, and the fourth to the 12th floor from April 10, 2022, to June 30, 2024, is for Rs 72.74 per sq ft, and from July 1, 2024, to April 9, 2027, the rate is Rs 83.65 per sq ft.
Mercedes-Benz R&D renewed lease for 5 years at Rs 2.5 crore per month rent
The automobile major renewed its lease for commercial space totalling 5.42 lakh square feet in the Embassy Crest building in Whitefield, spread across the ground, first, second, third, fourth, fifth, and sixth floors.
The lease started on May 1, 2023, and the company paid a security deposit of Rs 48 crore.
Outlook for 2024
Experts say within Asia Pacific, India is expected to remain the most preferred emerging region owing to its fast-paced growth trajectory, attractive pricing, better valuations, and higher yields.
"With expectations of the receding impact of global economic headwinds, global capability centres (GCCs) will resume real estate decisions in India. Owing to its talent pool, relatively lower office rentals and supportive legal framework, India will continue to remain a preferred destination for global players looking to set up their capability centres," Badal Yagnik, CEO of Colliers India, said.
Bengaluru-based developers also remain committed to expanding their commercial footprints in 2024.
"For our firm, we aim to add over 4 million sq ft of office space while continuing on a rapid expansion of housing projects in the city," Darshan Govindaraju, Director of Bengaluru-based Vaishnavi Group said.
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