RMZ rents out its Blore space to Honeywell for Rs 58 cr pa

In Bangalore, global technology firm Honeywell Technology Solutions (HTS) is taking up a million sq ft of office space, making it the second-biggest office leasing deal in the country in the last two years. At 48 per sq ft, Honeywell Technology Solutions will pay an annual rental of close to Rs 58 crore for the office space in RMZ's special economic zone, RMZ Ecoworld, people familiar with the transaction said.

A spokesperson for Honeywell confirmed the transaction but did not give any details. Bangalore-headquartered HTS is the captive technology and engineering facility of the $37-billion US firm Honeywell International. In terms of space, its deal with RMZ, which was handled by property consultant CBRE, is the second largest in the country's office space segment in the last two years after Goldman Sachs took up 1.6 million sq ft in the city a year ago.

According to people familiar with the matter, HTS will use close to 5 lakh sq ft of the space for consolidating its existing offices in the city while the rest will be used for business expansion. The 50-acre RMZ Ecoworld, earlier known as Adarsh Tech Park, was picked up recently by RMZ and Baring Private Equity Partners for Rs 1,000 crore. In it, RMZ got 1.4 million sq ft of built and leased space and rights to build another 6 million sq ft of office space on the land parcel on the outer ring road in Bangalore.

People close to the development said HTS had been in talks with RMZ and Mantri Developers for office space as it wanted to move out of its office at Kalyani Tech Park in south Bangalore in view of the upcoming metro rail work there. HTS decided to go with RMZ because it already has space in the SEZ, which was earlier run by Adarsh Developers.

The deal is good news for the domestic commercial office business, which is showing sign of revival after remaining depressed for a year. Businesses hired more office space in the first quarter of 2013 compared with a year ago, according to CBRE.