Goldman Sachs is in advanced discussions with southern real estate developer Prestige Estates for long-term leasing of half-a-million (five lakh) sq ft of office space as the global financial behemoth strengthens back-end operations catering to its worldwide businesses out of Bangalore.
Multiple sources from banking and real estate circles told VCCircle that a large office space deal was in the offing between Goldman Sachs and Prestige at the latter’s Shantiniketan project located in Bangalore’s IT surburb of Whitefield.
This will be one of the biggest office space deals in India in recent months even as the economy recovers from the post-Lehman crisis. One source directly familiar with the development said, Goldman may be striking a lease deal at Rs 28-30 per sq ft as part of a long-term agreement, believed to be for 15 years renewable at the end of every five years.
While this translates into an annual rental payout of $4-5 million, the significant development is Goldman Sachs’ unfolding plans for Bangalore. The move probably suggests that Goldman is making the city a larger back office hub hiring more people in the process.
The new office space can accommodate up to 5000 employees even though it is not clear whether the fresh lease talks is purely for expansion purpose or if the existing 3,000 employees in Bangalore will be shifted to the new location.
A query sent today by VCCircle to Prestige Estates chairman Irfan Razack did not elicit a response at the time of posting this article. When VCCircle contacted Razack a few weeks back, querying on the lease deal with Goldman Sachs, he had said, “it is not true.” An email sent to Goldman Sachs remained unanswered till the time of writing this article.
Bangalore is already Goldman’s third largest location after Salt Lake City and Singapore.
Goldman Sachs Vice Chairman and Asia Pacific head Michael Evans was recently quoted by The Economic Times as saying that Bangalore has been a great success story for the firm. Goldman has over 3,000 employees now and rapidly moving towards 4,000, the report had said.
The city’s human talent, knowledge capital and Goldman’s own philosophy of investing in people have combined well in developing Bangalore as a critical hub for the Wall Street’s marquee firm.
For Prestige, which has filed its DRHP for a possible initial public offering (IPO), a potential deal with Goldman will be a big catch with long-term rental income. Till now, Goldman has been anchored at Embassy Golf Links, promoted by another real estate major Embassy Group.
More recently, software giant Oracle’s move to buy one million sqft of office space from Brigade Enterprises in another Bangalore neighbourhood was called off. This deal, if it had been clinched, would have marked the largest single office space transaction in India in recent times.