Wells Fargo inks 1.3 million sq ft office lease with DivyaSree in Hyderabad – ET RealEstate

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MUMBAI | BENGALURU: Financial services firm Wells Fargo & Company has leased an entire office building with over 1.3 million sq ft space at developer DivyaSree’s project Orion in Hyderabad, in one of the largest commercial real estate transactions in the country amid the pandemic, said three people aware of the deal.

This is also the biggest office space deal in Hyderabad so far, with the US-based financial services firm paying over Rs 110 crore in annual rental for the built-to-suit property. The deal also assumes significance given the long-term commitment and ongoing discussions around emergence of the work-from-home model for businesses.

“The deal was signed a few days ago. Currently, the 22-storey building is under construction and is expected to be ready for fit outs in the next eight-nine months,” one of the persons cited earlier said, adding that the space will be used for the company’s expansion and is estimated to accommodate around 12,000 employees.

ET’s email query to Wells Fargo and DivyaSree remained unanswered as of press time.

Transaction advisor JLL India declined to comment.

Wells Fargo has been operating out of Hyderabad for more than a decade. It operates with its over 1 million sq ft office space spread over two towers that accommodate 10,000 employees.

The total lease tenure is nine years and the agreement includes a rental reset clause at the end of every three years with 15% escalation, one of the persons cited earlier said.

India’s office property market has shown resilience, as indicated by the rising net office take up despite the impact of Covid-19 on the business environment and the emerging challenges of the WFH model.

Office property markets across the country have witnessed a net absorption of 5.4 million sq ft in the quarter ending September, a 64% increase against the June quarter which was impacted due to the lockdown, showed data from JLL India.

The jump in office space absorption is an encouraging trend, especially after it dipped almost at a similar rate in the second quarter and the new deals involving large multinational organisations are being registered.

Following the sluggish leasing environment due to the outbreak of Covid-19, the office segment has started seeing some traction in the third quarter, with Bengaluru, Mumbai and Delhi-NCR leading the activity.

Several multinational companies, including Apple, Wells Fargo, Google, Walmart, Amazon and Microsoft have either leased or are in the process of leasing large office spaces across Bengaluru, Hyderabad and Chennai.

For instance, Standard Chartered Bank’s wholly owned subsidiary Standard Chartered Global Business Services (GBS) has entered into an agreement to pick up over 770,000 sq ft of office space on a long-term lease in DLF’s Chennai project for 15 years.

Amazon India has entered into a pact to lease nearly 260,000 sq ft office space at Godrej Two, a commercial office building in Mumbai’s Vikhroli suburb, while Apple is also negotiating a 350,000 sq ft office space in Bengaluru for its India and global operations and to open a large retail centre in the city.



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HDFC extends funding of Rs 200 crore to DivyaSree’s Bengaluru commercial project – ET RealEstate

MUMBAI: Housing Development Finance Corp has extended Rs 200 crore funding to realty developer DivyaSree Infrastructure Projects for construction of a part of the commercial project Technopolis in Bengaluru, said two persons with direct knowledge of the development.

The non-banking finance company will charge below 11% interest for the loan with a total tenure of 48 months.

The construction finance loan is expected to be repaid in one single bullet payment of Rs 200 crore at the end of 48 month from the date of first disbursement or earlier at the option to be exercised by HDFC.

The loan will be serviced through monthly interest during this period.

The Bengaluru-based developer will be using the funds for construction of nearly 1 million sq ft development spread over 10 floors of Technopolis project.

The office building has been designed and being constructed as a built-to-suit project for a specific customer.

“As part of the agreement, the borrower has created an exclusive mortgage and charge over the said property in favor of HDFC,” said one of the persons mentioned above.

Technopolis is a 68-acre mixed-use project with a total development potential of 5.5 million sq ft, including commercial office spaces, residential villas and luxury apartments.

The under construction office spaces in this project are being developed as built-to-suit spaces for tenants like Xerox, Deloitte, Thomson Reuters, and Landmark Group totaling around 2.5 million sq ft.

ET’s email queries to HDFC remained unanswered until the time of going to press. DivyaSree’s Managing Director Bhaskar Raju declined to comment for the story.

Last year, private equity player Kotak Investment Advisors announced a $400 million fund in partnership with DivyaSree Developers to build and acquire commercial office assets across the country.

The developer has developed over 19 million sq ft office spaces since 2005 and has 6 million sq ft offices under construction across Bengaluru, Hyderabad and Chennai. It counts Cisco, Dell, Oracle, Google, Accenture, IBM, Wells Fargo, Cognizant, UBS among its clients.



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Apple in talks for 3.5-lakh sq ft Bengaluru office for retail centre – ET RealEstate

BENGALURU: India’s pandemic-battered commercial property leasing market is being propped up by deals in and around Bengaluru and Hyderabad, even as other big cities such as Mumbai and NCR see transactions limping back to normalcy.

Apple is negotiating with builders for a 350,000 sq ft office space in Bengaluru which will serve its global markets, and plans to open a large retail centre in the city, people in the know told ET.

There’s another big deal in the works — US-based financial services firm Wells Fargo is in talks for 1.4 million sq ft of office space in Hyderabad to expand operations. “Both the deals are expected to be signed in the next few days and in both cases the companies are expanding their footprint in India,” the people cited earlier said. “These facilities will be up by 2021.”

Apple’s new Bengaluru office is expected to come up at Prestige Mink Square. The company is also looking to step up manufacturing in the country.

Last month, Foxconn started assembling Apple’s top-end iPhones at its Chennai plant.
Apple in talks for 3.5-lakh sq ft Bengaluru office for retail centre

Separately, Wells Fargo is in discussion for a built-tosuit office space in Hyderabad with DivyaSree developers.

“Wells Fargo already occupies around 1.2 million sq ft in Hyderabad and is looking to further expand business,” said another person aware of the deal. An email query sent to Apple remained unanswered till as of press time.

The communications head of Wells Fargo, too, did not respond to ET’s messages and phone calls. Recently, MNCs including Google, Walmart, Amazon and Microsoft have either taken or are in the process of leasing large office spaces across Bengaluru, Hyderabad and Chennai for future growth.

In the first half of 2020, the southern property markets accounted for about 48% of the total office leasing in India compared with 51% in the same period a year ago.

As per Knight Frank’s latest report, Bengaluru contributed around 4.8 million sq ft of office space leasing in the country, while Hyderabad was at 2.2 million sq ft.



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