A recent media report indicates that country’s IT major, Tata Consultancy Services Ltd (TCS) has leased around 630,000 sq.ft. of office space in Chennai’s Ozone Techno Park with a monthly rental of ₹2.8 crore.
TCS Leases 630,000 sq.ft. in Chennai
Documents accessed by real estate data analytics firm Propstack revealed that India’s largest information technology (IT) services company leased the space in Chennai’s Navalur suburb from Platinum Holdings Pvt. Ltd for 10 years after paying a deposit of ₹25.5 crore.
It appears that the rent will increase by 12% after every three years as per the lease terms.
So far, TCS did not released any comments in this regards.
If we observe the recent trends, office space leasing by domestic IT services companies has been slow across major Indian cities.
This is reflecting a slowdown in the sector amid global economic and geopolitical uncertainties.
In the meantime, the domestic IT services companies were continuing to expand, said Raja Seetharaman, co-founder, Propstack.
Technological Shifts Impacting IT Sectors
Further Seetharaman said, “Despite broader economic factors and technological shifts impacting the IT sector, companies continue to commit to significant office spaces, reflecting diverse operational strategies including work from office and regional preferences.”
Adding, “This transaction also indicates that while GCCs (global capability centres) continue to be the flavour, IT companies in India continue to expand.”
If we look into the previous years data, TCS leased over 1 million sq.ft. of office space in Hyderabad for 15 years, as per the information provided by the Propstack.
It’s registration took place in April this year, the lease had commenced on 1 October.
As indicated by the reports, the leasing by other IT firms has been slow, with Cognizant Technology Solutions Corp. and Wipro Ltd even giving up real estate to rationalise costs.
This is worsening to the extent that the IT major Cognizant sold about 600,000 sq.ft. of office property on Chennai’s Old Mahabalipuram Road to Bengaluru developer Bagmane Constructions for ₹612 crore earlier this year.
The property advisory CBRE India published that Gross office space leasing across India touched 18 million sq.ft. in the January-March period.
So far, GCCs, or the remote operations of multinational companies in India, accounted for 45% of this office space leasing.
