IBM Secures 8.3 Lakh Sq Ft Office Lease in Bengaluru for 10 Years

IBM India Private Ltd has recently leased an expansive 8.3 lakh square feet of office space in Bengaluru. This strategic move marks a continuation of IBM’s long-standing presence in the Indian IT hub, where the company has been steadily expanding its operations since its entry into the country in 1951. The deal, which was finalized for a 10-year period, underscores IBM's commitment to strengthening its foothold in India, particularly in Bengaluru, which is widely regarded as the Silicon Valley of India.

The leased office space is located in Embassy GolfLinks Business Park, a premier business hub situated in Domlur, Bengaluru. The specific area of the lease spans multiple floors across three buildings within the business park—Blocks A, C, and D—referred to as Cypress Point, Pacific Dunes, and Peach Tree, respectively. This location is known for housing several global technology giants, making it a prime spot for IBM to enhance its operations in India.

According to the property registration documents accessed via the real estate data analytics platform Propstack, the deal is notable not only for its scale but also for the financial terms agreed upon. The lease starts with a monthly rent of ₹140 per square foot, which, over the initial five-year period, will escalate by 12%, raising the rent to ₹156 per square foot. The escalation continues, with a 15% increase to ₹180 per square foot after eight years. These terms reflect the competitive nature of commercial real estate in Bengaluru, especially in high-demand areas like Embassy GolfLinks.

In addition to the office space, the lease agreement includes provisions for car parking, with the rent for each slot initially set at ₹4,526.70 per month from January 2025 to December 2029. This rate will increase to ₹5,206.70 for the subsequent five-year period. The deal also outlines maintenance charges, calculated on a closed-book basis, at ₹21 per square foot of the super built-up area until December 31, 2027. These financial commitments indicate the long-term nature of IBM’s investment and its intention to maintain a substantial operational presence in the region.

The lease is set to commence in January 2025, and as part of the agreement, IBM will benefit from an initial rent-free period of six months. This is a common practice in large commercial leases, providing the lessee with time to set up operations before rent payments begin. The security deposit for the lease amounts to six months of rent, further highlighting the scale and seriousness of this commitment.

An important aspect of the lease is the lock-in period of 10 years, meaning that neither IBM nor the lessor can terminate the lease within this timeframe. This stipulation provides stability and predictability for both parties, ensuring that IBM has a secure base for its operations and that the property owner has a guaranteed tenant for the duration of the lease.

This lease is part of a broader trend of large-scale commercial real estate transactions in Bengaluru, which continues to attract major multinational companies due to its robust infrastructure, skilled workforce, and favorable business environment. Earlier this year, IBM secured another significant lease in Hyderabad, where it acquired 1.06 lakh square feet of office space in the Divyasree Orion campus, located in the prime Gachibowli area. The Hyderabad lease, which commenced in April 2024, includes a monthly rent of ₹70.23 lakh, with a 4% escalation every five years.

The Embassy GolfLinks Business Park, where IBM’s new lease is located, has been a hotspot for similar deals, with other major companies also expanding their presence there. Recently, JP Morgan Services leased 5.6 lakh square feet in the same business park, and the Commonwealth Bank of Australia secured 8 lakh square feet of office space, reflecting the high demand for premium office spaces in Bengaluru.

IBM’s lease at Embassy GolfLinks highlights its dedication to expanding operations in India and capitalizing on the country's market and talent. This strategic investment demonstrates IBM's long-term commitment to strengthening its role in the Indian technology sector.

Image source- glassdoor.co.in