US e-commerce giant Amazon's office leasing spree is likely to continue in 2016, too. In one of the most high-profile deals in the Mumbai office market, Amazon has taken 30,000 square feet of office space for its corporate headquarters at One BKC building in Bandra Kurla Complex area of Mumbai on lease, a source familiar with the development said. Amazon will pay monthly rent of Rs 265 a sq ft, entailing Rs 9.5 crore a year. The US firm has the option to take another 10,000 sq ft in the same building, which it might exercise this year, sources said. The company's sales & marketing, and regional seller services teams will be based out of the office. A spokesperson for Radius Developers, which owns the property, confirmed the development.
When contacted, an Amazon India spokesperson said: "We don't comment on anything we may or may not do in the future."
"The Mumbai office is expected to facilitate seller services in the region," the source said, adding that Bengaluru would continue to be its back-end hub. US-based consultancy firm JLL advised Amazon on the lease transaction. Amazon is also looking for warehousing spaces in the region, sources added. Last year, Amazon did a 1.3-million sq ft office lease deal in Bengaluru with IT park developer Bagmane at the developers' business park along the city's IT corridor of Outer Ring Road. It was structured in three parts. Amazon absorbed around 300,000 sq ft of space. The remaining demand for one million sq ft of office space was being split into two equal parts, with the company planning to absorb one part over the next financial year. In 2014, homegrown e-commerce giant Flipkart had taken three million square feet of prime office space in Bengaluru from realty firm Embassy group at an annual rent of Rs 300 crore, which was touted to be the largest office deal in the country so far. Besides Bengaluru, Mumbai has also seen large office property deals recently. In one of the largest office space deals last year, Godrej Properties sold 435,000 sq ft office space in Godrej BKC to pharma major Abbott for about Rs 1,480 crore. Cisco, another US giant, has also taken 50,000 sq ft of space in One BKC for a rent of Rs 250 a sq ft, sources said. Cisco's country head and sales and marketing heads are expected to be based out of the Mumbai office, sources said. "They are investing in front end and coming closer to their banking customers." An email sent to Cisco did not elicit any response. According to Ashok Kumar, CEO of Cresa Partners, a commercial realty services firm, Rs 250-260 per sq ft is a good deal given that BKC commands rents of Rs 220 to Rs 260 per sq ft, barring a few complexes such as Maker Maxity, which command rents in excess of Rs 300 per sq ft. A recent report by CBRE said the top seven cities in the country absorbed 38 million sq ft of prime office space in 2015, the highest in the past five years. The demand was led by Bengaluru at 32 per cent and Delhi national capital region at 23 per cent, it said.
| IN EXPANSION SPREE |
- Amazon will pay rent of Rs 265 a sq ft per month or Rs 9.5 crore a year for space at One BKC
- Its sales and maketing team and regional seller services team would be based out of the Mumbai office
- US-based consultancy firm JLL advised Amazon on the lease transaction
- Cisco, another US giant, has also taken 50,000 sq ft of space in One BKC at Rs 250 a sq ft