Cognizant Renews Leases for 6.3 Lakh Sq Ft of Office Space in Pune

Both leases span a duration of five years each and feature a rent escalation of 15 percent after every three years. Cognizant is paying a monthly rent of ₹48.09 per square foot for the leased space in Block 4, amounting to ₹1.25 crore. The office space in Block 2, on the other hand, commands a monthly rent of ₹57.33 per square foot, resulting in a total of ₹2.10 crore.

Cognizant's decision to renew these leases is noteworthy, considering its earlier announcement of giving up a substantial amount of office space. The company aims to reduce its annual real estate costs by $100 million over the next three years, resulting in significant savings. This consolidation in office space is part of their strategy to invest in collaboration spaces in smaller cities while streamlining operations in large cities in India. The cost savings are estimated to reach $200 million, enabling Cognizant to optimize resources and drive efficiency.

Given Cognizant's significant presence in India, the decision to reduce office space will likely increase the availability of such spaces and potentially exert downward pressure on rents. However, the company's commitment to renewing the leases in Pune sends a positive message to the city's job market and the overall economy. Raja Seetharaman, the co-founder of Propstack, acknowledges the significance of this renewal and highlights its contribution to job retention and creation.