American multinational corporation Qualcomm has picked up over 1.8 million sq ft spread over an entire 20-storey commercial tower in realty developer K Raheja Corp’s information technology park in Hyderabad in one of the largest office lease transactions, said persons with direct knowledge of the development.
This will be Qualcomm’s largest such office set up anywhere outside of the US.
The company will be paying over Rs 3,054 crore as rentals over a total term of 15 years, including the escalations of 15% every three years, as per the terms of the agreement.
“The commitment for the large office space at the developer’s nearly completed project, Commerzone Madhapur, is part of Qualcomm’s growth and consolidation strategy,” said one of the persons mentioned above.
The property is currently not part of the K Raheja Corp-backed listed Mindspace Business Parks REIT. However, the REIT holds the right of first offer (ROFO) for this asset. The deal for this built-to-suit office is part of a pre-commitment Qualcomm had entered into earlier.
Qualcomm already has offices across the country in Mumbai, Bengaluru and Delhi, apart from multiple offices in Hyderabad. In Hyderabad alone, Qualcomm occupied 1 million sq ft office space across multiple commercial buildings in K Raheja Corp’s Mindspace IT park.
The company’s offices in Hyderabad are likely to be part of this consolidation plan.
The new office is expected to accommodate over 17,000 employees, including its existing staff in Hyderabad that is expected to shift here and new hires that will be part of its India growth plan.
The project, spread over nearly 9 acres, is nearly complete and is scheduled to be delivered by the end of this year, which is when the company is expected to start operating from here.
ET’s email query to Qualcomm and K Raheja Corp remained unanswered until the time of going to press. Transaction advisor JLL India declined to comment for this story.
Overcoming the challenge of the work-from-home model, office real estate continued to recover across key commercial property markets of India and has made a strong comeback.
The first nine months of 2022 have witnessed record net absorptions backed by strong supply completions and healthy pre-commitments.
According to a JLL India report, net office absorption has recorded a 107% year-on-year jump at 30.3 million sq ft across the top seven cities in the first nine months of 2022, backed by robust supply completions with healthy pre-commitments.
Hyderabad, in particular, has been leading the markets with the highest net absorption. The southern markets of Bengaluru and Hyderabad have been accounting for more than half of the net absorption.
While Covid-19 did have an impact on the market, the long-term demand for offices from global entities operating from India has been intact. Office occupiers usually take a longer-term view while making leasing decisions, and many occupiers are utilising the current situation to get attractive deals from landlords.
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