MUMBAI: The local arm of the US-based Cognizant Technology Solutions has picked up a 3.5-lakh square feet office space on a long-term lease in DLF’s information technology park at Kolkata’s Rajarhat locality, which is emerging as the eastern city’s belated answer to the technology hubs of Bengaluru, Gurugram or Noida.
Cognizant has leased the office space for nine years, and the facility would underpin its expansion in India, said multiple people with direct knowledge of the development. Rentals for the lease have been set at Rs 35 per sq ft a month, with the agreement carrying a rental reset clause every three years.
“The deal has been signed and concluded a few weeks ago. The new office can accommodate up to 4,000 employees,” said one of the persons mentioned above.
ET’s mailed query to Cognizant India remained unanswered.
DLF declined to comment for the story.
However, it added that Cognizant is one of its larger relationships and has shown confidence in the company due to quality of service, safety, compliance and sustainability.
The company has leased the space in the second phase of DLF IT Park that has total 1.1 million sq ft leasable area, and with this deal, the park will see nearly 100% occupancy level. The developer is now looking to expand its commercial portfolio in Kolkata as both of its IT parks with over 2.4 million sq ft leasable spaces are fully occupied. These assets are part of the portfolio of rental arm DLF Cyber City Developers (DCCDL), its joint venture with Singapore sovereign fund GIC.
India is an important part of Cognizant’s global business strategy and has around 40 offices, including delivery centres across Bengaluru, Pune, Mumbai, Chennai, Kolkata, National Capital Region (NCR) and Kochi. Of these, Kolkata alone has nine offices. ET recently reported that Cognizant’s India headcount increased by 9,000 to over 2.03 lakh employees at the end of 2019.
With active operations at the site, Cognizant will be able to avail the tax benefits before the expiry of the SEZ sunset clause on March 31.
With the Budget not extending the sunset clause beyond March 31, the recent rush seen among corporate tenants to operate out of SEZs in order to avail tax benefits is likely to abate. Experts, however, are optimistic that the government may announce a new framework, as SEZs have proved their employment generation and export potential over the last decade or so.
According to Section 10AA of the Income Tax Act, units in SEZs get a phased tax-holiday for a period of 15 years. The benefit is available to only those units that start operations before March 31 this year. Around one-third of India’s office market supply comes from SEZs, and IT SEZs form a major chunk of exports, valued at more than $43 billion annually.
Sustained robust demand for office spaces pushed leasing activity across the country in 2019 to a record high. Information technology and business process management sectors continued to be the biggest demand drivers.