KLA Tencor, a California-based provider of process control systems, has leased 3,20,000 sq ft of office space in the upcoming DLF Downtown Taramani in Chennai, three people aware of the deal said.
They did not give any financial details of the deal, but said it is one of the largest transactions the city has seen in the commercial leasing segment. The company is expected to relocate to the new office within the next three months, they added.
CBRE, a global property consultant, was the transaction advisor for the deal.
Sriram Khattar, managing director, rental business, DLF, did not comment on the deal but said the initial phase of DLF Downtown at Taramani in Chennai should be completed in the next few months.
“It’s more than 80% leased and we are confident to lease the rest of the space before project completion of this phase.
“The second phase of 1.1 million sq ft is also under construction and this too has been leased. We have potential to develop another 3.5 million sq ft at this site,” Khattar said.
Of the 3.5 million sq ft, DLF has pre-leased 2.6 million sq ft with average rental of about Rs 80 per sq ft per month.
DLF Cyber City Developers Ltd (DCCDL), the rental arm of DLF Ltd, reported Rs 5,419 crore revenue in FY 23, a 19% year-on-year increase.
In 2022, the absorption of office space in Chennai reached approximately 6.1 million sq ft, reflecting a year-on-year increase of 63%.
In Q1 of 2023, Chennai saw leasing activity surge by 19% from the previous quarter, with approximately 2.0 million sq ft of space being taken up.
The city accounts for 10% of the overall office stock in India.
In terms of supply in 2022, Chennai saw a supply addition of about 4.1 million sq ft, a significant y-o-y increase.
DLF is seeing healthy demand for newer developments, indicating a clear shift by large occupiers towards quality workplaces.
According to a report by ICICI securities, since January 2023, global macro headwinds in the form of rising interest rates and tech MNC hiring slowdown (MNCs account for 67% of Indian office space demand) have led to a slowdown in large leasing decisions.