Amazon hires record level of office property in 2016

Last year's space leasing equal to seven years' total

US-based e-commerce giant Amazon took about a million square feet of office spaces on lease last year, making it equal to what it took between 2008 and 2015 in the country.

Founder and chief executive Jeff Bezos said last year that it would invest another $3 billion in India, amid intense competition in the e-commerce space.

Much of the leased space could be used for seller and development services, besides a 30,000-sq ft building in Bandra Kurla Complex for its India headquarters.

According to Propstack, a data analytics firm for commercial property transactions, various Amazon entities have leased about 1.3 million sq ft since 2008.

Amazon launched its online marketplace in India in 2013 but had been present in the country for eight years for research and development services.

An Amazon India spokesperson  said: “As a policy, we do not comment on what we may or may not do in the future.”

Properly consultant Colliers International elaborated on the latest activity by Amazon as the year closed — 100,000 sq ft in the  Mohan Co-operative area in Delhi, 150,000 sq ft in Ambience Corporate Tower 2 in Gurgaon and 300,000 sq ft in World Trade Tower  Noida.

Before that, through 2016, it leased 90,000 sq ft at Ambience Corporate Tower II NH8 in Gurgaon and 350,000 sq ft at Mindspace, Madhapur, in Hyderabad.

Rival Flipkart, which operates through Flipkart India, Flipkart Internet and Flipkart Payment Gateway, recently took 600,000-sq ft office space in an Embassy group project in Bengaluru. 

“Amazon has been investing systematically in expanding its product portfolio, bringing Indian merchants on to their Indian and global platform, and expanding its delivery infrastructure,” said Devangshu Dutta, chief executive officer at retail consultancy Third Eyesight.

Dutta said with its plans to grow private labels and the current e-commerce foreign direct investment regulations which require companies to increase the share of unrelated merchants, the Bezos-led company requires significant organisational capacity and hence is growing office spaces.

Added Raja Seetharaman, director at PropStack, “Amazon is going ‘all out’ in the battle for e-commerce market share in India. They realise that India would be their next biggest market outside the US. With a median age of 27 and growth rate of 6.5-7 per cent, Amazon is willing to invest ‘whatever it takes’ to win.”

The company’s long-term investments, along with futuristic technology like drone deliveries, which it is already piloting in the US, indicate that Amazon is well positioned to be a leader in the e-commerce sector, Seetharaman said.

LEASE DEALS IN 2016

• Leases 100,000 sq ft in Mohan Co-operative Area in Delhi
• Takes 150,000 sq ft in Ambience Corporate Tower 2 in Gurgaon
• Takes 300,000 sq ft in World Trade Tower in Noida 
• Takes 90,000 sq ft  at Ambience Corporate Tower II NH8 in Gurgaon & 30,000 sq ft in BKC in Mumbai 
• 350,000 sq ft at Mindspace, Madhapur in Hyderabad 

Source: Colliers International