MUMBAI | BANGALORE: Global aerospace major Boeing’s India arm has picked up over 1.50 lakh sq ft of office space in Bengaluru’s Hebbal locality on a long-term lease spanning over 9 years, said two persons with direct knowledge of the development.
The company has leased the space, in reality, developer RMZ Corp’s commercial project RMZ Azure in Hebbal locality of Bengaluru. Of the total tenure, lease rental for the initial three years is set at Rs 74 per sq ft a month, taking the total rentals to over Rs 13 crore per annum. The agreement includes a rental escalation clause of 15% increase every 3 years.
“The deal has been inked and concluded recently. Boeing India has leased the said office space for its research and development operations,” said one of the persons mentioned above.
The company is currently undertaking fit-outs at the newly leased office and is expected to start operations from this premise from July.
Boeing is looking to undertake work related mainly to data analytics and advanced environmental-friendly coating for next-generation aeroplane health management tools and other software tools for airlines and airports to improve operations and reduce costs said the persons mentioned above.
ET’s separate email queries to both Boeing and RMZ Corp remained unanswered till the time of going to press.
It may be recalled that the US-based aircraft major is setting up an electronics manufacturing and avionics assembly facility spread over 36 acres in Bengaluru. This will be the Chicago-headquartered company’s second largest facility outside Seattle.
“Bengaluru’s commercial real estate sector has been consistently recording above-average performance over the years. Office space demand in the city saw captive centres, flex spaces, and IT-BPM as among the top sectors. The markets remain buoyant with conventional as well as ancillary demand,” said Ramita Arora, managing director- Bangalore, Cushman & Wakefield India.
Arora believes that new-age businesses are also being nurtured in Bengaluru, with projected high growth rate. The aerospace sector is bustling with activity in the city because of the availability of a niche talent pool and good educational institutions.
RMZ Azure is a recently completed commercial project with a total leasable area of 4 lakh sq ft. With this latest transaction, the property is 60% leased.
Demand for commercial real estate continues to be robust, led by rising occupancy levels in both core office markets, including business districts as well as upcoming growth corridors.
Total gross leasing volume in India touched almost 13 million sq ft during the first quarter of 2019, which is 1.45 times higher than the corresponding quarter of last year, showed recent data from Cushman & Wakefield India.
Apart from robust leasing, top commercial property markets are also experiencing strong pre-commitment activity. During the quarter, nearly 1.8 million sq ft of office space was pre-committed.