July 5: Reliance Jio has scooped up 1,40,000sq ft of office space in Sector V for Rs 61 crore, a benchmark transaction in this segment that could prop up realty in Bengal's tech hub and adjoining New Town-Rajarhat.

The Mukesh Ambani-owned telecom behemoth inked the deal last week, taking the top two floors of Godrej Waterside IT Park. The office space comes along with a parking lot for around 100 cars.

Jio, which is roiling the Indian telecom sector with rock-bottom rates for data and voice, will use the space to relocate some of its existing workforce and for future expansion. Prior to this deal, the company had been operating out of rented accommodation (around 1 lakh sq ft) at Ecospace, Rajarhat.

The new acquisition adds to the large space in a Globsyn property in Sector V where the call centre and switchgear for Jio's telecom operations are located. Reliance Jio has a presence within the city proper too - at Saturday Club, the first office space that the company had rented when it started operations.

Ravindra Chamaria, chairman of the Infinity Group that has co-promoted Godrej Waterside, confirmed the transaction. "Reliance has taken the space on long-term lease. This is a positive development and augurs well for the office space market in Salt Lake's Sector V and Rajarhat too," he said.

In Salt Lake realty parlance, "long-term lease" is a euphemism for sale since a lessee pays upfront to the lessor instead of monthly rent.

Reliance Jio's business head for the east, Tarun Jhunjhunwala, could not be reached for comment. People aware of the deal said Reliance would relocate most of its workforce from Ecospace, where it operates out of three blocks, to the Salt Lake office, where 1,200 employees can be easily fit in.

The company is tipped to retain the Saturday Club space since it is keen to have a central address from which to operate the other businesses of Reliance Industries Ltd such as petroleum and retail.

Sources said it might not immediately release Ecospace either given its plans to expand operations in Bengal and the rest of the eastern region at a rapid pace.

According to a statement by Reliance chairman Mukesh Ambani during the Bengal Global Business Summit in January 2016, Jio had till then invested more than Rs 5,000 crore. "This latest realty transaction reaffirms Reliance's commitment to Bengal," a source said.

Jitendra Khaitan, chairman and managing director of Pioneer Property Management Ltd that facilitated the Sector V deal, said Reliance had been looking to buy large floor space. "For a real estate market like Calcutta, this is a significant transaction," he told Metro.

Office market

Infinity Group head Chamaria said "enquiries" for office space had increased this year. The office market, a key indicator of business and industrial activity, has remained range-bound and shallow over the past few years. Delhi and Mumbai have grown in this span, as have Bangalore and Pune. Bangalore leased out 8.6 million sq ft of office space in 2016, compared to 0.58 million sq ft in Calcutta, according to data provided by real estate consultancy firm JLL.

Office vacancy, a reflection of demand-supply dynamics, tells the same story. In Bangalore, Pune and Hyderabad, vacancy in 2016 was at record lows of 3.8 per cent, 5.6 per cent and 9 per cent respectively. Calcutta's was 28 per cent.

While real estate developers in Bangalore, Pune and Mumbai added 7.9 million sq ft, 6.6 million sq ft and 6.3 million sq ft respectively of office space, Calcutta added barely 2.7 million sq ft. "IT, telecom, e-commerce and BFSI (banking, financial services, insurance) usually drive the office leasing market. In Calcutta, the dominance of IT is significant. The industry had hoped that the Mamata Banerjee government would allow Infosys to set up an SEZ campus here and create a buzz about Salt Lake and Rajarhat," said a real estate analyst.