US-based semiconductor major Microchip Technology has acquired 168,000 sq ft of office space in One Golden Mile, a grade-A commercial tower located in the business district of Kokapet in Hyderabad for an estimated Rs 175 crore, in one of the largest buyout deals in the commercial real estate market in the city.
Capital values in the Kokapet market range between Rs 9,000 and Rs 10,500 for a grade-A commercial space.
Microchip and promoters of One Golden Mile declined to comment on the valuation.
Microchip estimates that the newly-acquired space will sustain its growth plans for the next 10 years as they continue to hire and expand at a time when other major tech companies have announced layoffs and hiring freezes.
“Microchip has enjoyed significant and sustainable growth over recent years, and our team in India is a critical contributor to that success,” said Srikanth Settikere, vice president and MD, Microchip Technology India Pvt Ltd. “This investment is another step towards expanding our capabilities in India, which in turn will drive greater long-term business opportunities regionally and globally.”
Cushman & Wakefield was advisor to the deal.
Microchip Technology is headquartered in Chandler, Arizona, with development centres in Bengaluru, Hyderabad and Chennai, with a total of 2,000 employees.
This transaction is the first of multiple investments by Microchip to expand its research and development footprint in India.
One Golden Mile (OGM) is a premium commercial property co-promoted by Aurean, Eskar and Terminus with a total footprint of 500,000 sq ft consisting of boutique office spaces and high-street retail.
“Our objective for this project was to create true value differentiation through design and superior specifications to enable businesses to reach their maximum potential and gain a competitive advantage,” Pushkin Reddy and Rithwik Mali, managing partners for One Golden Mile, said in a joint statement.
The deal signals a positive outlook for the commercial office segment in Hyderabad.
Also, it reaffirms the belief that demand for well-designed office spaces will continue to sustain despite concerns of oversupply, remote working and a global economic downturn.
“Hyderabad is at the forefront of innovation in the semiconductor industry, and Microchip’s investment into Hyderabad reconfirms the city’s position as the preferred choice for semiconductor firms,” said Veera Babu, managing director for the Hyderabad office of Cushman & Wakefield.
As per a Cushman and Wakefield office report, net office absorption in 2022 stood 36.5 million sq ft. Bengaluru, with a 28% share, accounted for the lion’s share of pan-India net absorption for the year, followed by NCR (20%) and Hyderabad (15%).
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