In one of the most high-profile leasing deals this year, US-based apparel and home furnishing retailer JC Penney has taken 130,000 square feet (sq ft) of space on lease in a plush office complex in Bengaluru.
JC Penney will pay a rent of Rs 10.92 crore per year or Rs 70 per sft a month and also has the option to take another 130,000 sft space in the Embassy Manyata Business Park, said a source familiar with the development.
"JC Penney will use this as a support centre for its US retail operations," the source said.
Mails sent to the Embassy Group, the owner of the property, and JC Penney did not elicit any response.
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Property experts said the deal was in line with market as Bengaluru business parks typically command a rent of Rs 70-75 per sft.
Though JC Penney did not look at opening stores in the country, it has been sourcing from India for over a decade through JC Penney Purchasing India Private Limited. The retailer has around 1,000 stores in the US.
"Bengaluru has been a favourite of global corporations to set up their backoffices due to its manpower base and cost efficiencies," said a senior property consultant. According to reports, Bengaluru is home to 35 per cent of the 1,000 global in-house centres in India.
Global retailers such as Walmart, Tesco, Target and others already have their tech and backoffices in Bengaluru. Recently, US-based banking giant JPMorgan took 220,000 sft of office space in the Embassy Golf Links Business Park on lease for its support centre. JP Morgan would pay around Rs 120 per sft or Rs 31.68 crore per annum as rent.
Embassy Manyata is spread across 110 acres on the Outer Ring Road in North Bengaluru with a total building area of 9 million sq ft and houses 90,000 employees. The complex has tenants such as IBM, Fidelity, Target, Rolls Royce among other 170 companies.
According to Colliers International, Bengaluru, with about 13.43 mn sq ft of office absorption and 12.85 mn sq ft of new construction, continues to hold the number one position across cities. The city shared about 33 per cent and 41 per cent, respectively, in total absorption and new supply among eight major cities in the country this year. The city's traditional primary office demand driver IT/ITeS shared about 57 per cent (7.69 mn sq ft) of the total absorption, followed by BFSI (banking, financial services and insurance) 20 per cent, manufacturing 13 per cent and others nine per cent.
Among the major leasing deals in Bengaluru last year were financial giant Wells Fargo (860,000 sq ft) in Embassy Tech Village, oil major Shell (788,000 sft) in RMZ Eco World and US e-commerce giant Amazon (500,000 sft) in the Constellation Business Park.