MNCs Progressively Prefer Procuring to Leasing Office Space

MNCs are buying more and more properties to set up their offices rather than leasing offices as they favored for years, marking a tactical move that signals the increasing significance of the Indian market and the continuing dedication of the global companies.

Foreign firms including Adobe, SanDisk, Amazon, Honeywell, GlaxoSmithKline Pharma, Sanofi Aventis have lately procured office space in India. Multinational companies are responsible for 35% of entire commercial asset sales in the country in the initial three months of 2014. In the year 2012, MNCs contributed 60% of the complete commercial asset sales, supported by two deals of $100 million throughout the year.

Firms that have set up their function in India and are certain about their projections and abilities in the country are now customizing their real estate necessity so they can be more economical.

For numerous global firms, the choice to procure or lease space is among the most significant part of their plan. While evaluating the choice of leasing against outright purchase, the outright purchase was a better option from fiscal viewpoints as well as the message about assurance to this market that it sends to employees and the wide ecosystem of partners, customers and the wider community.

The boost in outright purchase exhibits that many foreign organisations are thinking the same way. As per a report, such deals worth Rs 2470 crores have come up over the past two years.

The move concurred with the stable rise in rentals from 2011 to 2013 in most of the key markets where multinational companies have leased office spaces. Rental values in Bangalore’s Whitefield rose 11-34% during this period, according to a report. According to developers, effortless funding and other long-standing advantages are prompting these transactions.

Multinational companies used to procure space in preliminary days but stopped as they did not feel like investing more money. They are currently looking again at establishing own campuses because of access to cheap funding. Moreover, buying own space is more lucrative for them than leasing due to general cost of funding. There is also value approval in due course.

Prestige Estates Projects has lately concluded three big transactions with SanDisk, Adobe and IT services company 24/7 Customer for office spaces that are presently under construction. An outright acquisition of office also enables firms to handle the facility better and employ the space more effectively. There is firm control on building infrastructure and maintenance like amenities, transport, security, electricity etc.

Seat pet square foot can be optimally utilised to house more people for growing the business and build a positive environment for the employees. Wholly owned facilities pursue different levels of homogeny which aids a firm build an impact among the employees as well as in the market as a long-term player.
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This release was published on openPR.