Cisco Systems' India subsidiary has renewed its lease on nine commercial buildings totalling more than 2.7 million square feet, reported The Economic Times, citing sources. The San Jose-based firm has renewed its lease with Blackstone Group subsidiary Nucleus Office Parks at its Cessna Business Parks on Bangalore's Outer Ring Road.
Cessna Business Parks, a special economic zone (SEZ) for information technology, was previously held by real estate developer Prestige Estate Projects and was sold to Blackstone as part of the over Rs 7,460 crore transaction.
Following the completion of the Prestige purchase, Blackstone integrated this asset into Nucleus Office Parks, which holds the US private equity firm's freestanding office properties that are not affiliated with any Indian developer.
Occupants and tenants of large office complexes around the country, including huge enterprises, are renewing their lease agreements, signalling their preference despite the much-discussed emergence of the work-from-home option during the Covid19 pandemic outbreak last year.
Since April 2020, over 21 million square feet of office space have been renewed in response to the advent of the Covid19 pandemic.
Tata Consultancy Services (TCS) signed approximately 1.3 million square feet of space, Concentrix signed 8.46 lakh square feet, JP Morgan signed 8.44 lakh square feet, IBM signed 7.93 lakh square feet, and Amazon signed 6.34 lakh square feet across key Indian cities.
Renewal interest in office leases by large firms is indicative of a resurgence in corporate confidence and hiring, the report claimed.
The office market's resilience in India following the epidemic is partly due to the fact that the IT/ITeS sector has been virtually unscathed by the economic slowdown. IT/ITeS occupiers continued to account for around 50% of office leasing activity in 2020.
The Indian IT industry, which is the primary demand driver for office space in India, is predicted to hire over 350,000 employees in 2022, more than doubling the average over the previous five years, requiring additional office space.
The top five IT firms, which account for roughly a third of the 4.4 million-strong Indian IT-BPO industry, added 55,000 individuals in the June quarter and are on track to end the year with net hiring of around 1.5 lakh personnel, 50 per cent more than the previous decade's greatest year.
Taking cues from 2020, the second half of the year is projected to see a surge in office space activity.
Net office absorption across seven key cities is projected to stay stable in 2021, at about the 25.6 million square feet attained in 2020, JLL India said in recent research.