US-based online retailer, Amazon and its Indian competitor, Flipkart, are once again scouting...
US-based online retailer, Amazon and its Indian competitor, Flipkart, are once again scouting for a significant amount of office space in Bengaluru to keep pace with their accelerated growth and hiring plans.
Both Amazon and Flipkart are looking to hire prime office space to house their back-end operations, including marketing and research divisions, sources familiar with the matter said. While Flipkart is looking to add another 2 million sq ft to its existing office space in Bengaluru, Amazon is looking to lease another 1.3 milion sq ft.
In October, Flipkart signed the country’s most expensive leasing deal when it took up a 3 million sq ft of office space in the Embassy TechVillage, a project by the The Embassy Group, for R300 crore. According to these sources, Flipkart would like to add additional office space in the same real estate project that houses its existing operations, but is in negotiations with some other developers as well.
Both Amazon and Flipkart declined to comment.
The transactions by Amazon and Flipkart alone will potentially add a 3.3 million sq ft of commercial real estate absorption in Bengaluru this year. Demand for such large offices bodes well for the city, which serves as India’s foremost IT hub. In 2014, Bangalore recorded the highest office leasing net absorption (9. 39 million sq ft) among the top eight cities of India, growing by 72% over the year earlier, according to a Jones Lang LaSalle India estimate.
Analysts say Bengaluru is expected to witness higher traction in leasing of office space in 2015 as the economy revives, business sentiment improves and companies look to hire more.
According to a report by Motilal Oswal issued in January, the e-commerce industry is expected to create 50,000 jobs in the next three years, holding a tremendous potential for the Bangalore real estate sector. Since FY14, leading e-commerce companies have been among leading clients for commercial real estate developers.
Robust activity in the commercial real estate space also has a ripple effect on the housing sector. “With large companies taking up marquee office spaces, there is an anticipation that job opportunities will improve,” said Sanjay Dutt, executive MD, South Asia, Cushman & Wakefield.