e-commerce giants to absorb big real estate this year _ business standard news
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2/16/2015 E-commerce giants to absorb big real estate this year | Business Standard News
http://www.business-standard.com/article/companies/e-commerce-giants-to-absorb-big-real-estate-this-year-115021600082_1.html 1/8
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2/16/2015 E-commerce giants to absorb big real estate this year | Business Standard News
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Companies » News » News
E-commerce giants to absorb big real estate thisyear
In 2014, Flipkart absorbed 3 office properties in Bengaluru spread over 411,000 sq ft; Snapdeal
took one, of 115,000 sq ft, in Delhi; and Jabong took a 120,000 sq ft one in Gurgaon
Nivedita Mookerji | New Delhi February 16, 2015 Last Updated at 00:57 ISTAdd to My Page
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After making headlines with their fundraising, deals and valuationsthrough last year, and increasing prime office space absorption across big cities like Delhi-NCR, Bengaluru
and Hyderabad, e-commerce majors are set to be in news in 2015 for picking up big real estate.
To push their ambitious growth plans, leading companies like Flipkart, Snapdeal, Jabong and Amazon hadfired the office-leasing real estate market in 2014. And, if their current plans are any indication, this year could
see and even greater uptake by them, say expert.
Flipkart's yet-to-be-signed campus in Bengaluru, likely to be spread over three million square feet, could be
the biggest office space deal for an e-commerce firm in 2015. Amazon, Jabong and Snapdeal - and others -
2/16/2015 E-commerce giants to absorb big real estate this year | Business Standard News
http://www.business-standard.com/article/companies/e-commerce-giants-to-absorb-big-real-estate-this-year-115021600082_1.html 3/8
are likely to join the race to access big real estate.
Flipkart had last year topped the list among e-commerce players by taking up three office properties, totalling411,000 sq ft, on Bengaluru's Outer Ring Road, according to data available with Cushman & Wakefield, a
leading international consultancy. The e-tailer refused to reveal its real estate plans but it is learnt that Flipkart- which has 10 offices in Bengaluru, where it is headquartered, and 13 warehouses across the country - is in
the final stage of signing a deal for its proposed campus, where all its employees will be accommodated.
The company had identified Embassy Tech Village on Bengaluru's Outer Ring Road for its campus, andentered a "pre-commitment" with the Embassy group in October 2014. This campus will be spread over 1.2
million sq ft, with an option for an additional 1.8 million sq ft. The current rental rate for the property ispegged at around Rs 48 per sq ft per month - that translates into a rent of Rs 14.4 crore a month, or over Rs170 crore a year, according to consultants. On-site construction could take up to three years, and the
campus might be in place by 2017, when Flipkart turns 10.
Chief Executive Sachin Bansal had recently told Business Standard that Flipkart was planning to double itstech team over 12 to 18 months from the current 1,000. The total employee strength, 33,000 at present, will
grow with business expansion.
In 2014, Jabong and Snapdeal made large office space transactions, too. They are expected to continue todo so this year. While Jabong picked up 120,000 sq ft in Gurgaon, Snapdeal absorbed 115,000 sq ft in
Delhi last year. CEO Praveen Sinha confirmed Jabong was this year taking a new and larger rented office.But he did not disclose the details. The company, with more than seven warehouses, also has campus plansbut those are not immediate.
Snapdeal CEO Kunal Bahl had earlier said his company did not have ambitious real estate plans. But the
company already has several offices in New Delhi's Okhla commercial locality.
Though American e-commerce major Amazon refused to discuss the specifics of its office expansion plans, itis believed to be looking at a large office space of more than one million sq ft in Bengaluru this year. Aspokesperson for Amazon pointed out that the company already had campuses in Bengaluru, Chennai and
Hyderabad, besides offices in 15 Indian cities. "We also have eight fulfilment centres, covering seven Indian
states, that offer a total storage capacity of over half a million square feet to retailers and small and mediumbusinesses." Fulfilment centres are equivalent to warehouses for storage of products. "We are growing at a
fast pace and you can expect our real estate footprint to grow this year," the Amazon spokesperson said.
Estimates suggest the total warehouse space uptake could more than double in 2015 to four million squarefeet. Also, besides the likes of Amazon, Flipkart, Jabong and Snapdeal, those like UrbanLadder, PepperFry,
Quikr and FabFurnish are also looking at taking up more office space as their businesses grow.
In 2014, the Grade-A office space taken on lease by online or internet firms in Delhi-NCR touched 567,499sq ft, against 84,000 sq ft the previous year, according to Cushman & Wakefield data. In Bengaluru, the
absorption by e-commerce firms rose to 622,811 sq ft from 453,495 sq ft a year earlier. Hyderabad more
than doubled the take-up to 8,542 sq ft from 4,100 sq ft the previous year. Mumbai grew from no absorptionin 2013 to 27,000 sq ft in 2014. Similarly, Kolkata showed signs of an e-commerce buzz, with an absorption
of 4,600 sq ft in 2014, against nothing a year before.
In spite of growth shown in many cities, e-commerce companies' total absorption across eight cities in Grade-A localities went up marginally to 1.26 million sq ft in 2014 (from 1.24 million sq ft in 2013), primarily
2/16/2015 E-commerce giants to absorb big real estate this year | Business Standard News
http://www.business-standard.com/article/companies/e-commerce-giants-to-absorb-big-real-estate-this-year-115021600082_1.html 4/8
because of the Chennai office space take-up declining. From 690,800 sq ft in 2013, the absorption by e-commerce companies in Chennai dropped to 31,150 sq ft last year. The e-commerce real estate take-up is
still a small portion of the overall office pie - in 2014, the total Grade-A office space absorption across eightmajor cities grew to 29.5 million sq ft from 22.2 million sq ft the previous year. The projection is 36.8 million
sq ft for 2015 and 40.1 million sq ft for 2016, data show.
PUSHING GROWTH PLANS
In 2014, Flipkart absorbed 3 office properties in Bengaluru spread over 411,000 sq ft; Snapdeal took
one, of 115,000 sq ft, in Delhi; and Jabong took a 120,000 sq ft one in GurgaonDelhi-NCR, Benagaluru, Hyderabad, Mumbai and Kolkata office space absorption by e-commerce
firms grew significantly in 2014
Warehouse space take-up may double to 4 million sq ft in 2015
Growth in number of employees and consumers fuelling realty boom
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2/16/2015 E-commerce giants to absorb big real estate this year | Business Standard News
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2/16/2015 E-commerce giants to absorb big real estate this year | Business Standard News
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