“Amazon has been renewing its leases but has not exercised hard options across many locations. All the four renewals totalling 5 lakh sq ft were registered earlier this month,” a person aware of the matter said on condition of anonymity.
The renewal comes on the heels of two larger ones signed by Amazon recently. The US firm renewed a 650,000 sq ft office space on the outer ring road of Bengaluru for development centre business.
The firm has also acquired about 600,000 sq ft and 800,000 sq ft of space in Gurgaon and Hyderabad respectively for web services, development centres, seller services and transportation services.
The latest deal marks the most significant renewal transaction for office lease this year, with companies taking a cautious approach to expansion and embracing more flexible office spaces.
“Despite recent global headwinds that might have been a bit concerning, a preliminary observation suggests India’s office markets continue to exhibit good leasing volumes as of the first quarter of 2023,” said Anshul Jain, managing director-India & Southeast Asia at Cushman & Wakefield. “Besides, US labour market tightness bodes well for new GCCs to enter India. I guess the macro fundamentals remain intact for the grade-A commercial office market to thrive as we saw in the previous four to six quarters.”
A Cushman & Wakefield report says that gross leasing activity (GLV), including renewals, remained resilient. “Close to 16 million sq ft of GLV was recorded during 1Q-23, with Mumbai and Pune contributing a dominant 40% to this leasing volume, followed by Delhi-NCR (national capital region), whereas Bengaluru witnessed relatively muted GLV this quarter,” said the report.
Overall, the office market saw a net absorption of around 8.3 million square feet in January-March 2023, 67% higher than a year ago, said Cushman & Wakefield.
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