IBM Seals ₹143 Crore Deal for 830,000 Sq Ft Office Space in Bengaluru’s Embassy REIT, Strengthening Its Hold in the Business Market

IBM has renewed its lease for 830,000 square feet of office space in Bengaluru, with an annual rent of ₹143 crore. This is one of the biggest single office space deals in India this year. The renewed lease ensures IBM’s continued presence in one of India’s key business hubs.

The long-term lease is for space in Embassy Golf Links Business Park, owned by Embassy REIT. IBM will occupy three buildings in this commercial property. According to a document from data analytics firm Propstack, the lease includes a 12% rent increase after five years and a 15% increase after eight years. The agreement is for 10 years, with a monthly rent of ₹140 per square foot.

Embassy REIT, India’s first publicly listed real estate investment trust, did not comment on the deal. In the first quarter of this financial year, Embassy REIT leased about 1.9 million square feet of office space across 22 deals, mainly driven by global capability centres, which made up 70% of the leasing activity. IBM is one of Embassy REIT’s biggest tenants, contributing nearly 7% to its rental income.

IBM has a significant presence in the Indian office space market, with about 10 million square feet of leased space across major cities like Bengaluru, Hyderabad, Noida, Gurugram, and Kolkata. The company employs around 100,000 people in India, which is about one-third of its global workforce.

Many large corporations in India, including Bosch, Synopsis, State Bank of India, Tech Mahindra, and HCL Technologies, continue to lease or renew their office space agreements, showing a preference for traditional offices despite the rise of remote work.

The office space market in India has seen a 19% increase in leasing in the first half of 2024, reaching 29.4 million square feet across the top six cities. This trend shows strong confidence from occupiers and favourable market conditions. The technology, engineering, and manufacturing sectors were the main drivers of demand in the second quarter of the year, according to a report by professional services firm Colliers.