Deloitte may sign up 1.4 million sq ft of office space in Hyderabad

Source: Economic Times  Sep 18, 2014.

India's commercial real estate market is seeing big deals being struck once again in the top cities. In one of the largest leasing deals in the country,Deloitte is close to signing up 1.4 million sq ft of office space in Hyderabad for its BPO business. This isn't the only 1 million sq ft plus leasing deal in the market at present. Several top companies are looking for space to consolidate their offices and, more importantly, prepare for the impending growth that is expected as the economy improves. Bangalore leads in terms of companies looking for large office spaces.

While Tata Consultancy Services recently took up just under a million sq ft of space split between Noida and Gurgaon in the National Capital Region, Flipkart is looking to set up a new 1.5 million sq ft campus in Bangalore keeping in view the tremendous pace at which the e-commerce sector has been growing-."This signals revival in growth prospects for business. Many of these companies now have visibility about new business coming in," said Anckur Srivasttava, chairman of GenReal Property Advisers. Until a few months ago, many companies were still not too sure about growth.

Political uncertainty added to this. With a strong government at the centre and some new policy measures, companies have felt emboldened to go ahead with their plans.

Others looking to lease office space include management consulting firm Accenture, which is scouting for a million sq ft of office space in Bangalore. American financial services firm Wells Fargo is looking to lease 1.2 million sq ft in the city. One million sq ft of office space seats more than 10,000 people.

Juggy Marwaha, managing director, south, for Jones Lang LaSalle, which has the mandate to hunt for space for Flipkart and several other companies, said Bangalore will come back to peak 2007 levels of office space absorption—between 8 and 9 million sq ft this year. A spokesman for Accenture said: "We regularly evaluate our real estate portfolio on an ongoing basis to meet our business requirements and align our office space requirements accordingly."

A spokeswoman for Deloitte said the company will not be able to comment due to its internal compliance and regulatory policies. Flipkart declined to comment. Aveek Mukherjee, managing director, Wells Fargo India Solutions said: "We are currently conducting a proactive exercise to understand our potential real estate options in the city. We are yet to finalise on any property or expansion at this time."

Many of these firms are looking at built-to-suit facilities that will be set up over the next 24 months or so by which time they expect the economy to also scale up. This is also an opportunity for many corporates to lock in real estate when rentals are low. "Everyone is now anticipating that supply in relevant areas will get constrained, so rentals will rise," said Anshul Jain, country chief executive at real estate consultancy DTZ. "There is also a pickup in demand because of positive economic indicators."

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