Flipkart slashes mega B'luru office lease deal
BENGALURU: Flipkart has substantially scaled down its need for a huge office space in Bengaluru, which it leased almost two years back, as e-commerce companies in the country struggle to find new avenues of growth and raise fresh funds amid sharp cuts in their valuations.
India's biggest e-commerce company is now looking to lease just 0.83 million sqft office space. The initial agreement was for 3 million sqft from southern property developer Embassy Group, which was subsequently downsized to 2 million before the company finally decided on the current lease deal.
The deal was originally struck when the funding boom was at its peak. At the time, it was the country's single largest office lease deal.Flipkart has not raised funds in the past 18 months, even as it defends its leadership position in a bruising marketplace war with Amazon.
The lease, which is for 20 years, would see Flipkart pay Rs 50 per sqft, which translates into an annual rent of about Rs 50 crore.
Embassy Office Parks chief executive Mike Holland confirmed the development, but denied there was a dispute between the two companies. "We have had conversations with them and see this as another normal part of any business, which provides opportunity for us to add some more space into the market at a time when there is not so much available," Holland said.
Nitin Seth, Flipkart's chief operating officer, said, "We believe the arrangement gives us ample room to expand in future, especially since it represents an expansion of 35% compared to the space we currently occupy across all our offices in Bengaluru."
India's biggest e-commerce company is now looking to lease just 0.83 million sqft office space. The initial agreement was for 3 million sqft from southern property developer Embassy Group, which was subsequently downsized to 2 million before the company finally decided on the current lease deal.
The deal was originally struck when the funding boom was at its peak. At the time, it was the country's single largest office lease deal.Flipkart has not raised funds in the past 18 months, even as it defends its leadership position in a bruising marketplace war with Amazon.
The lease, which is for 20 years, would see Flipkart pay Rs 50 per sqft, which translates into an annual rent of about Rs 50 crore.
Embassy Office Parks chief executive Mike Holland confirmed the development, but denied there was a dispute between the two companies. "We have had conversations with them and see this as another normal part of any business, which provides opportunity for us to add some more space into the market at a time when there is not so much available," Holland said.
Nitin Seth, Flipkart's chief operating officer, said, "We believe the arrangement gives us ample room to expand in future, especially since it represents an expansion of 35% compared to the space we currently occupy across all our offices in Bengaluru."
