Wipro, Cognizant,IBM for big-ticket realty deals

4 DEC, 2010, 01.06PM IST, SHILPA PHADNIS,TNN 

 Riding on the rapid recovery from recession, many large firms are signing up big-ticket commercial real estate deals in different parts of Bangalore. 
Industry sources say that Accenture has committed to take 8 lakh sqft in Pritech Park on the Outer Ring Road (between Marathalli and Sarjapur Road). HP and Wipro are said to have recently taken 2.5 lakh sqft and 1.2 lakh sqft respectively in Pritech. 

The east and south of the city have been the traditional IT belt, but now the north too is buzzing. IBM, Cognizant, Accenture and HP will be renting space in the second phase of Manyata Embassy Business Park near Hebbal.

Sources in the industry say that IBM has committed to 5 lakh sqft of office space in Manyata phase II. The Big Blue has already occupied 3 lakh sqft in the first phase of the park. 
"There is a lot of demand from our existing IT clients," Embassy Group CEO Gopi Krishnan said. The IT sector, he said, continues to expand at the highest rate in Bangalore. "In 2007, we signed an agreement with IBM to deliver 2 million sqft of space over the next four years," Krishnan said. 

The IBM portfolio is so huge that it contributes 33% to Embassy's rental revenues. Other companies like Cognizant and Target are also looking at Manyata as part of their expansion plans. Embassy is developing an additional 9 mn sqft in Manyata. 

Real estate consultancy CBRE estimates that Bangalore has seen an absorption of 6.8 mn sqft of office space this year. That's up from the absorption of 5 mn sqft in 2009, but still lower than the peak of about 10 mn sqft in 2008. "As companies are expanding and consolidating their operations , we see the demand for commercial real estate going up," said CBRE deputy MD (south India) Ram Chandnani. 

The majority of the expansion is expected to come up along the Outer Ring Road, and the micro markets of Whitefield , Jayanagar, JP Nagar, Bannerghatta Road and north Bangalore. "The buoyancy in the market is also reflected in the rentals. For instance, rentals on Outer Ring Road have stabilized between Rs 40-50 per sqft. In 2009, rentals had fallen sharply," said Kaustuv Roy, executive director of Cushman & Wakefield India . 

The pan-India office space demand over the next five years is estimated to be about 240 mn sqft. 

Bangalore, NCR and Mumbai are expected to account for 46% of the total demand. Kolkata and Chennai are likely to see higher growth rates though, with suburban locations having attractive price points, according to a Cushman & Wakefield report.