Flipkart, online e-commerce giant which has tasted insuffuciency of infrastructure with its Koramangal-based buildings when the “One Billion Deal Day” was held early this month will soon move into 3 million square feet office space at the Embassy Park paying Rs.300 crore per annum rent.
The lease deal is also part of Flipkart’s future expansion plans that include 12,000 more employees and withstand the competition from Amazon India and Snapdeal in India’s fast growing $3-billion market. The rental value is priced at around Rs 90 per sq ft per month and it is a for fully furnished office space.
“Flipkart has signed an irrevocable letter of intent with Embassy Group for leasing 3 million sq ft office space. The final agreement will be signed within 90 days,” property consultant JLL India Country Head and Chairman Anuj Puri said. “It is the biggest single occupier leased transaction, in terms of space volume, in India which demonstrates the beginning of Indian real estate office market recovery,” he added.
JLL India acted as the agent for the biggest office space lease deal in Bangalore so far. Embassy Group Chairman and Managing Director Jitu Virwani said, “3 million sq ft of office space will be leased to Flipkart in phases. We have won this transaction because of our reputation and experience of having dealings with large MNCs like Microsoft and IBM.”
Located on Outer Ring Road, Bangalore, the “Embassy Office Park” was developed in partnership with private equity firm Blackstone, Virwani said.
JLL India South India MD Juggy Marwaha said,”This is the largest ever office leasing transaction in India. It has taken over a year of thorough due diligence and process led by JLL India.” He said there were more than 10 developers who had offered office space for FlipKart and Embassy Office Park was selected after a rigorous process of due diligence.
Founded in 2007 by Sachin Bansal and Binny Bansal, Flipkart has its current headquarters in Koramangala, Bangalore. It made headlines in April after reporting a gross merchandise of $ 1 billion in 2013-14. Flipkart projects its sales to reach Rs.10 billion this year. Its average rate of sales online is currently at 10 products per minute and hopes to generate a revenue of Rs.50 billion ($0.81 billion) by 2015.
Last year, it raised $160 million from private equity investors Dragoneer Investment Group, Morgan Stanley Wealth Management, Sofina SA and Vulcan Inc. with participation from existing investor Tiger Global. This year, it has raised $210 million from Yuri Milner’s DST Global and its existing investors Tiger Global, Naspers and Iconiq Capital.
Flipkart’s future plans include raising $500 million for a likely listing in the US for 2016.