MNCs acquire office space worth Rs 2,470 crore in India

NEW DELHI: Real estate consultant Cushman& Wakefield has claimed that multi-national companies (MNCs) have preferred to buy office space in India instead of leasing it and have invested close to Rs 2,500 crore in less than three years.

"MNCs have been increasingly showing keen interest in buying offices in India contrary to their traditional approach of leasing space a few years back for overseas operations," C&W said in a release.

As rents are going up in some of the prime markets where MNCs are operating, these companies have put in their profits to buy offices rather than taking on lease looking at the long term benefits, the consultant said.

According to information available, MNCs have contributed 43 per cent of the total sales value of commercial offices across the country recorded during January 2012 and March 2014.

During this period, the sales value of office space was recorded at Rs 5,730 crore, of which MNCs’ contribution was Rs 2,470 crore, C & W said, adding MNCs belonged to ITeS, BFSI, Pharma and FMCG sectors were the leading buyers of office spaces.

Among major office deals, Citibank India bought 0.3 million sq ft office space in Mumbai for Rs 1,110 crore and Bayer group bought 0.16 million sq ft in Mumbai for Rs 130 crore. GlaxoSmithKline also bought office space worth Rs 140 crore in Delhi-NCR while Cognizant acquired office space in Hyderabad for Rs 110 crore.

Sanjay Dutt

Reacting to the trend, C&W Executive Managing Director, South Asia SanjayDutt said: "Companies that are operating in India are confident of their projections and potentials in the country and are now tailoring their real estate requirement so that they can be more cost-effective.”

He further said, "Companies belonged to IT&ITes and pharma are looking to consolidate their research and development divisions with their front-end divisions in a single set-up and are looking for assets to purchase as it proves to be a cost effective strategy for companies."

"Capital values have also gone up moderately during the period. Hence firms stand to benefit financially if they deploy capital to buy the spaces to occupy," C&W added.