Honeywell Leases Space at RMZ Ecowell

Published on April 30, 2013, 06:42 PM IST
bangalore real estate news

Global technology firm Honeywell Technology Solutions (HTS) is taking up a million sqft of office space in Bangalore, making it the second-biggest office leasing deal in the country in the last two years.

At 48 per sqft, Honeywell Technology Solutions will pay an annual rental of close to Rs 58 crore for the office space in RMZ's special economic zone, RMZ Ecoworld, people familiar with the transaction said.

A spokesperson for Honeywell confirmed the transaction but did not give any details. "As we continue to be locally invested, we were looking at efficiencies and co-location synergies to enable better optimisation and productivity opportunities," the spokesperson said in an emailed response.

Bangalore-headquartered HTS is the captive technology and engineering facility of the $37-billion US firm Honeywell International.

In terms of space, its deal with RMZ, which was handled by property consultant CBRE, is the second largest in the country's office space segment in the last two years after Goldman Sachs took up 1.6 million sqft in the city a year ago.

According to people familiar with the matter, HTS will use close to 5 lakh sqft of the space for consolidating its existing offices in the city while the rest will be used for business expansion.

"Our plans are in line with long-term direction and strategy and will be taken up in a phased approach," the HTS spokesperson said.

The 50-acre RMZ Ecoworld, earlier known as Adarsh Tech Park, was picked up recently by RMZ and Baring Private Equity Partners for Rs 1,000 crore. In it, RMZ got 1.4 million sqft of built and leased space and rights to build another 6 million sqft of office space on the land parcel on the outer ring road in Bangalore.

People close to the development said HTS had been in talks with RMZ and Mantri Developers for office space as it wanted to move out of its office at Kalyani Tech Park in south Bangalore in view of the upcoming metro rail work there. HTS decided to go with RMZ because it already has space in the SEZ, which was earlier run by Adarsh Developers.

The deal is good news for the domestic commercial office business, which is showing sign of revival after remaining depressed for a year. Businesses hired more office space in the first quarter of 2013 compared with a year ago, according to CBRE.

Data provided by two property advisors last month showed office space absorption had dropped from about 35 million sqft in 2011 to 26 million sqft in 2012. Leasing of office space is widely seen as an indicator of business sentiment in a country.