Tech companies lap up 12.55 lakh sq ft office space in Chennai – ET RealEstate

CHENNAI: While some tech companies are surrendering their office spaces partially or wholly, some others including financial services giant BNY and global electronics company KLA Tencor have signed up real estate deals during the lockdown to enhance their city presence.

Between April and August when the city was either fully or partially locked down due to Covid-19, more than 12.55 lakh square feet of office space has been lapped up, mostly by tech companies.

While Omega Healthcare signed up for 41,000 square feet at Chennai One IT park, banking giant BNY pocketed 6.25 lakh square feet space at Embassy. Desi payments company NPCI and Nine Stars, too, joined the space hunt, sources said. BNY did not respond to a TOI questionnaire, but sources confirmed the deal,

“These are encouraging deals in the city. The companies, though mandated before the pandemic, decided to go ahead with the transactions, indicating their keenness to expand or set up operations in the city,” said Srinivas Anikipatti, senior director at real estate consultancy Knight Frank.

“While companies were talking about cost saving and productivity improvements due to work from home (WFH), creativity appears to have taken a back seat, our clients tell us,” he said.
Tech companies lap up 12.55 lakh sq ft office space in ChennaiReal estate industry sources said that WFH is effective when it’s training related, but when its R&D or manufacturing design, collaboration with colleagues enhances quality. “Cost saving is from productivity and not quality. We will get to see return to campuses or a hybrid model. This full WFH may not work in the long run” sources said.

“These deals indicate that there is nothing to panic, as earlier thought. Since January nearly 2.2 million square feet has been absorbed and we may end 2020 with 4.2 to 4.3 million square feet. (In 2019 Chennai absorbed 5.8 million square feet) ,” said Rajesh Babu, Chief Consultant, at real estate consultancy Asset Advise.

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WeWork India provides 15,700 sq ft office space in Bengaluru to Khaitan & Co – ET RealEstate

NEW DELHI: Co-working major WeWork India, which is owned by the Embassy Group, has provided nearly 15,700 sq ft of office space in Bengaluru to leading law firm Khaitan & Co.

Khaitan & Co will be setting up operations in WeWork centre at Embassy Quest in Bengaluru. The law firm has taken up 300 desks covering an area of 15,697 sq ft, the company said.

“In the current climate, companies especially enterprises and multinationals are opting for flexible workspaces and reconsidering fixed asset investments in order to remain agile and retain flexibility to adjust operations based on the market conditions,” WeWork India CEO Karan Virwani said.

WeWork caters to these needs while providing the right mix of culture, community and collaboration, he added.

In 2017, WeWork Global entered into a partnership with Bengaluru-based Embassy Group to enter Indian market. WeWork India currently has 34 centres comprising 60,000 desks across six major cities.

“The nature of the workspace required by law firms has been evolving over the years, and the needs have particularly changed during this global pandemic. WeWork’s unique ability to provide fluid, flexible and managed workspaces made the decision to partner with a leader such as WeWork an easy one,” said Rajiv Khaitan, Senior Partner at Khaitan & Co.

WeWork India has taken space on lease at Embassy Quest building from Embassy Services Ltd, which is part of Embassy group and is into facility management business.

“Embassy Services has the leasing rights for Embassy Quest and this partnership with WeWork India is another step towards Embassy group’s commitment for the flexible workspace sector,” Embassy Services MD & CEO Pradeep Lala said.

WeWork India had in June raised $100 million from US-based WeWork Global for the future growth of the company. It offers seats in the range of Rs 5,000-40,000 per desk per month.

Co-working players take office space on lease from real estate developers and other landlords to set up their centres. They provide desks to corporates, freelancers and start-ups.

The co-working segment, which grew at a rapid pace in India in the last few years, has been badly impacted by the COVID-19 crisis. However, experts believe that the need for flexible space will only rise post the pandemic, as corporates will look to cut capex on setting up own offices.

As of Q1 2020, WeWork globally has 828 centres in over 149 cities and 38 countries.

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Canada’s Ivanhoe Cambridge, Embassy Group in talks for office platform in India – ET RealEstate

BENGALURU | MUMBAI: Ivanhoe Cambridge, a real estate subsidiary of Canadian institutional fund manager CDPQ, is in advanced talks with Bengaluru-based Embassy Group to set up a platform to invest in office properties across India, said two people with direct knowledge of the development.

The platform, to be set up in the form of an Alternative Investment Fund (AIF), will see Ivanhoe Cambridge initially investing $150 million (about 1,110 crore).

“The deal is expected to close by September and this will be the first commercial platform from Ivanhoe Cambridge. The fund has been on the lookout for a partner for the office platform,” said one of the persons mentioned above.

The proposed entity will be looking for greenfield investment opportunities, while Embassy will also bring in some of its existing land bank for the development together with the Canadian company. “Ivanhoe will own around 80% stake in the platform, while the remaining stake will be held by the Embassy Group,” said the second person quoted above.

Ivanhoe Cambridge and Embassy Group declined to comment. This platform will be merged with the proposed combined Indiabulls-Embassy entity once the merger gets concluded, for all future developments. Embassy will be responsible for managing the development for the newly-built platform.

Indiabulls Real Estate and two subsidiaries of Embassy Group have entered into a definitive agreement to merge their residential and commercial projects across markets to create one of the largest property development platforms in the country. The combined entity will hold both the developers’ ongoing, completed but unsold and planned projects with 80.8 million sq ft of development potential. This exercise marks Indiabulls Group’s exit from real estate business.

Embassy Group already has an alliance with US PE major Blackstone Group for buying ready and leased office properties in India. This alliance between Embassy and Blackstone will continue, while the proposed partnership with Ivanhoe will look for opportunities for new developments.

Global institutional investors, including Blackstone Group, Brookfield Asset Management, Singapore’s sovereign fund GIC and Goldman Sachs have been investing in Indian realty assets for the past few years. In addition to this, more funds are eyeing investment and alliance opportunities.

Ivanhoe Cambridge also has a strategic co-investment platform with Piramal Enterprises to provide long-term equity capital to large residential developers across the five major metro cities in India — Mumbai, Bengaluru, NCR, Pune and Chennai.

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WeWork India offers discount up to 50% to gain new clients – ET RealEstate

NEW DELHI: Co-working firm WeWork India on Thursday announced discounts up to 50 per cent for 3 months and free access to its members to over 800 centres globally, as part of its strategy to attract new clients amid the COVID-19 pandemic. The company globally has 828 centres in over 149 cities and 38 countries.

WeWork India, which is owned by realty firm Embassy Group, has 34 centres in six cities comprising 60,000 desks and 40,000 members. In June, it raised USD 100 million from US-based WeWork Global.

The co-working segment was performing well on rising need of flexible workspace from corporates and start-ups, before the pandemic hit demand of office space.

In a statement, WeWork India said it will offer global access to members, enabling them to work from any location across the nation or the world for no extra credit charge.

“For the first three months, WeWork India will offer hot desks at 50 per cent off and dedicated desks at 15 per cent off with the set-up fee waived,” it said adding that the offer is available till August.

Currently, the per-hot desk rate is between Rs 5,000 and Rs 18,000 monthy, while dedicated desk costs between Rs 10,000 and Rs 25,000 across 34 centres.

At its 20 centres, WeWork India has also introduced one-price model for private offices.

Private office across 20 centres will now be available at Rs 15,000-17,000 per desk per month, against Rs 20,000-22,000 earlier.

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