Homework recommended before you look for

new office space in Hyderabad

The most common response we hear, once a client confirms that they have a requirement for a new
office, is to send them a list of options. This seems, for clients, the easy way to do things. We feel a
better way for the client is to do a little more research / talking / homework before seeing any
option. A client looking for an office has to be keep in mind a few points as follows:
Location: To start with clients need to narrow down to a tentative area for the new office.
Office locations prevalent in demand are Hitec city, Madhapur, Kondapur,
Gachibowli, Nankramguda, Raidurg, Kaveri Hills, Jubilee Hills, Banjara Hills,
Begumpet, Somajiguda, Nagarajuna circle, Secunderabad, Abids etc.
Most of the modern buildings have been developed towards Hitec city side of the
city.
The core areas have mostly older buildings.
Mid-areas like Banjara & Jubilee Hills have a combination of old and new buildings.
Area: Clients need to understand the various terminologies used to define areas:
Carpet areas: Basically area within the office walls which can be carpeted. Normally
this area is 70-80% of the super built-up area.
Built-up area: This is carpet area plus wall thickness and proportionate area of
specific corridors, if any, made to split the floor plan.
Super built-up area: This is built-up area plus proportionate areas of common
corridors / staircases, lifts, ramps, tanks etc.
Normally the parking areas / basements are not added in calculating super built-up
areas.
Fitouts or bare shell: Office spaces are categorized into many types as follows:
Bare shell means the landlord provides the bare space and the tenant does the entire
investment on interiors. The bare shell space will be completed with walls, faade,
common area flooring, electrical panel & meters, water and drain connections. In
some case the landlord may provide the internal office flooring and toilets.
Extended bare shell means landlord provides bare shell space (as defined above) with
add-ons like DG Backup and toilets. The DG backup facility is connected to the
common panel from where the tenant has to run internal wiring as per their interior
plan. The tenant does the entire investment on interiors.
Warm shell means landlord provides bare space with air-conditioning and DG
backup facilities. Air-conditioning is either provided as split units or central chiller
with a floor level AHU. The internal ducting as per interiors plan would be the
tenants scope. The DG backup facility is connected to the common panel from
where the tenant has to run internal wiring as per their interiors plan. In some
options, the landlords also provide toilets.
Built-to-suit (BTS) fitted out space means landlords provides a fully furnished office
space as per tenants choice. This is almost a turnkey solution being provided by the
landlord. Some interior elements like server, access control and UPS for systems will
be part of the tenants scope.
Fully furnished office means landlords provides a furnished space with older fitouts
which they might have done for an earlier tenant a few years back or bought out
fitouts from the previous tenants. Here again some interior elements like server,
access control and UPS for individual systems will be part of the tenants scope.

 Built-to-suit (BTS) facilities: These are rare deals now where a client who has a large
space requirement signs a BTS contract wherein the entire complex or significant
part of the complex is tailor made to the tenants choice. Such deals may also cover
interior fitouts.
Budget:
For tenants, if they require a fully furnished office space then, a decision needs to be
taken as to whether they need a brand new fitted out office space or older fitted out
office space. The former will always be more expensive than the latter and would
require the tenant to offer lock-in periods to justify the landlords investment. On the
other hand a newly fitted out office space would be as per the tenants choice of
layout and corporate color schemes. Rental budget also depends on the choice of
location.
For buyers the budget will depend on location and buildings specs of bare or warm
shell.
Number of workstations: Some companies are specific that they need a certain number of
workstations but they may not have complete clarity on the exact space that is required for
this requirement. Our inputs are as follows:
IT market is divided into software and BPO type office setup. Five years back, a
software occupant would plan 100sft per employee / workstation. Incase a client
needed 100 workstations then area required was 10000 sft.
Over the past few years, competition and cost cuttings measures have reduced the
area per employee for software to 60-75ft. In todays scenario a 100-seater office
space would be developed in 7500-8500sft of office space.
In todays scenario a 100-seater BPO requirement would be developed in 50006000sft of office space.
Challenge remains for companies who want 100-seater offices in lesser sft and older
fitted out offices. This is a tricky requirement and has to be handled on a case-to-case
basis.
SEZ or Non-SEZs: In todays age a lot of companies want to operate from SEZs to take
advantage of tax benefits available. Some points to be considered are as follows:
Before a company decides on whether to locate itself in a SEZ or not, we recommend
that they should evaluate whether their company is SEZ ready. This evaluation is
necessary since the SEZ route would involve the company approaching the SEZ
authorities with export projections for atleast the next 5 years. The evaluation could
be done with tax and management consultants.
The current IT SEZ format does not seem conducive for smaller or medium sized IT
companies.
The current SEZ format seems to be better for companies with 3rd party export
billings. Companies, which are basically serving their parent companies aboard, may
not be keen to get into SEZs.
Getting into an SEZ is a comprehensive process and so is the exit mechanism.
Currently IT SEZs properties are slightly more expensive than non-SEZ properties.
Parking:
Newer office complexes would be able to provide 1 car park for every 1000-sft space
leased.
Some modern complexes are planned with even better parking ratios.
Older buildings may not be able to cater to such parking requirements.
Companies need to have clarity on number of car parks & cost, if any, associated
with it while evaluating options.

 In some property options the 2-wheeler parks have to be accommodated in the carparking ratio itself, while in some other options landlords might offer separate 2wheeler parks independent of the car parks.
Power requirements: On a thumb rule basis power requirements in bare shell spaces would
range around 1kva per 100 sft of leased space. In warm shell space the power requirements
would be significantly lower since air-conditioning chiller is part of the landlords scope.
DG back-up: Clients should check if the back-up is adequate to cover the power
requirements of the office. It is also advisable to check if back-up is provided through a
single genset or multiple units.
Employee perspective:
Most of the corporates prefer to be located in the core or mid areas of the city.
Most of the IT companies prefer to be located in Hitec city only.
There is no hard and fast rule about this and companies choose as per their
requirements.
For some companies the building profile is important to attract the best available
talent hence modern buildings are required.
Leveraging: Incase a client needs to buy space then they should first evaluate their
leveraging capability with banks / funding institutions before starting a search. This aspect is
important since a lot of clients are not aware of their budget or funding options. For e.g.
currently banks do not offer loans to NRIs to buy commercial properties.
It always helps to understand an office requirement in detail before seeing options. It will always
save time for everyone involved and could also help any possible heartburn issues. The above
research is just the beginning of the entire process of selecting a new office.
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