American technology major Cisco Systems’ India arm has renewed its lease for 9 commercial buildings totalling over 2.7 million sq ft in the largest office lease transactions in the country since the pandemic outbreak, said persons with direct knowledge of the development.

The San Jose-headquartered company has entered into an agreement with the Blackstone Group-entity Nucleus Office Parks to renew the lease at its Cessna Business Parks at Outer Ring Road in Bangalore.

Cisco has renewed the lease for this space, which houses its data labs and development offices, for the next five years at 20% escalation to existing rentals,” said one of the persons mentioned above.

Cessna Business Parks, an information technology special economic zone (SEZ), was earlier owned by realty developer Prestige Estate Projects and was sold to Blackstone as part of the over Rs 7,460 crore transaction.

Following the conclusion of the Prestige transaction, Blackstone integrated this asset with Nucleus Office Parks that houses the US private equity major’s standalone office assets that are not part of any alliance with Indian developers.

ET’s separate email queries to Cisco and Nucleus Office Parks remained unanswered until the time of going to press.

Occupiers and tenants of large office complexes across the country including big corporations are renewing their lease agreements indicating their preference despite the much-talked about emergence of the work-from-home option following the outbreak of Covid19 pandemic last year.

Corporates are going for renewals of large office spaces in key office markets with several large deals that were concluded recently.

Following the outbreak of Covid19 pandemic, around 21 million sq ft office spaces have been renewed since April 2020.

In some of the largest deals, Tata Consultancy Services (TCS) signed around 1.3 million sq ft, Concentrix signed 8.46 lakh sq ft, JP Morgan 8.44 lakh sq ft, IBM 7.93 lakh sq ft and Amazon 6.34 lakh sq ft across major Indian cities.

Rising interest in renewing office leases by big organizations is an indication of the return of business confidence and hiring scenario.

The strength displayed by the office market in India since the pandemic owes much to the fact that the IT/ITeS sector has been largely unaffected by the economic downturn. IT/ITeS occupiers continued to account for a majority of the office leasing activity in 2020 at around 50%.

The Indian IT industry, the lead demand driver for office real estate in India, is expected to hire more than 350,000 employees in 2022, double the average in the past five years, translating into more office space.

The top five IT companies, representing nearly one-third of the 4.4 million-strong Indian IT-BPO industry, hired 55,000 people in the June quarter and are likely to conclude the year with net hiring of around 1.5 lakh employees, 50% higher than the best year in the past decade.

Taking cues from 2020, the second half of the year is expected to witness increased momentum in the office space pick up.

In 2021, net office absorption across seven major cities is likely to remain flat at around the levels of 25.6 million sq ft achieved in 2020, in case there are no further lockdowns, JLL India said in a recent report.

It expects the year 2021 to most likely close on an encouraging note provided vaccination targets are achieved and the country does not see another major outbreak of the virus.



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