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American investment banking services company The Bank of New York Mellon Corporation (BNY Mellon) is in advanced talks to lease an entire tower with office space spread over nearly 1 million sq ft in Pune’s Kharadi locality from realty developer Prestige Group for a tenure of nine years, said people with direct knowledge of the development.
BNY Mellon is close to leasing the office space at an annual rent of nearly Rs 82 crore, taking the total rental pay out to nearly Rs 738 crore over the entire tenure of the agreement, excluding the rental escalation.
The deal is expected to be concluded soon and will be the largest commercial real estate transaction so far this year.
“BNY Mellon is likely to use the newly-leased office space to house its global capability center (GCC) through BNY Mellon International Operations (India) Private Ltd,” said one of the persons mentioned above.
The lease agreement is likely to include a clause to escalate rentals 15% every three years. As part of the deal, the multinational bank will be picking up over 850,000 sq ft office space immediately and will also hold an option to extend the same by over 150,000 sq ft.
The commercial tower Prestige Alphatech with total 17 floors is nearly completed and the New York-headquartered banking services company is expected to take possession to start its fit out work soon.
BNY Mellon’s Mumbai representative office was set up in 1983 and continues to serve as its key liaison point for the Indian client base. Its technology development, technology operations and remote infrastructure management services company, BNY Mellon Technology Pvt Ltd, became part of the BNY Mellon Group in 2003.
BNY Mellon International Operations (India) Pvt Ltd was set up in 2004 to provide global operations service capabilities to BNY Mellon. The company established a subsidiary, Pershing India Operational Services Pvt Ltd, in Chennai in 2013. It has over 12,000 employees across three locations—Mumbai, Pune and Chennai.
ET’s email query to BNY Mellon and Prestige Group remained unanswered until the time of going to press.
With global capability centres, captives and shared services being the key growth drivers, the office market in Pune and especially the Kharadi micro market is buzzing with activity. The supply in the Kharadi micro market alone is set to reach 25 million sq ft in 3-4 years, said property consultants.
Last week, Deloitte Consulting India leased over 156,000 sq ft of office space for 10 years at the International Tech Park in Kharadi as part of its India expansion plan. Recently, Germany-based global research publisher Springer Nature also leased over 110,000 sq ft office space at Gera Commerzone, an IT special economic zone (SEZ) in Kharadi locality, for 10 years.
According to property brokers, the tenant profile here features a diverse range of large multinational corporations from the banking, financial services and insurance (BFSI), information technology and IT-enabled services (IT/ITeS), ecommerce and engineering sectors, among others.
The commercial office segment, which was significantly impacted by the pandemic, has made a comeback in the last 3-4 quarters, supported by strong economic growth, increased hiring and a return to the office trend.
Gross office leasing rose 36% on-year to 51.6 million sq ft in July-December 2022, according to a recent report. New office space completions grew 28% to 49.4 million sq ft.
Office rental levels were stable or grew across all markets during the period, marking it as the second half-yearly period since the first half of 2019 that this occurred. Bengaluru and Pune office markets grew the most during the second half of 2022 at 11% and 7% on-year, respectively. Ends
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