Flipkart co-founder Sachin Bansal’s financial services startup Navi has taken up prime office space in Bengaluru’s Koramangala area for its new corporate office, said two people familiar with the transaction.
The 110,000 sq. ft of office space is in Prestige RMZ Startech, a Grade A office complex. Earlier this year, cab-hailing firm Ola leased about 400,000 sq. ft of space in the same building, to bring together multiple teams and functions in one facility as it continues to hire and grow its electric business in particular.
Until a few years ago, Koramangala was the default starting place of choice for entrepreneurs. As startups grew in size, they moved to larger campuses to accommodate bigger teams. Even Flipkart moved out of its Koramangala home to Embassy Tech Village on Outer Ring Road a few years ago, as did food delivery firm Swiggy.
Prestige recently leased around 400,000 sq. ft to edtech firm Byju’s in its property on Outer Ring Road.
Bengaluru-based Navi was founded by Bansal in May 2018 after he moved out of Flipkart.
“Navi will pay around ₹110 per sq ft for the space, which is roughly ₹15 crore annually," said one of the people mentioned above, on condition of anonymity.
Navi posted consolidated total income of ₹222 crore in 2019-20, its first full year of operations, compared with ₹12.7 crore in 2018-19. Navi was operational only for a few months in FY19.
“Navi has been in active expansion and hiring mode. After making various acquisitions, the company aims to hire in digital lending as well as insurance roles in Bengaluru," said the second person, asking not to be named.
Last year, Navi received ₹3,226 crore of funding led by Bansal and other individual investors and, separately also raised ₹204 crore from private equity firm Gaja Capital and others. Bansal also acquired DHFL General Insurance from Wadhawan Global Capital for around ₹100 crore.
Pre-covid, Bengaluru had low Grade A vacancy of 5% and accounted for around 22% of net absorption of office space in 2019. It is expected to retain more than 25% of net absorption over 2021 and 2022.
The office space market saw a 47% year-on-year decline in the January-March quarter with net absorption at 3.6 million sq. ft. The second covid wave may lead to a further delay in recovery in the commercial office sector, which continues to see a dip in leasing volumes this year.
After a seven-year bull run, with rising rentals, falling vacancies, and record leasing of 42 million sq. ft in 2019, the commercial real estate market stumbled last year as globally businesses hit a pause in expansion and fresh leasing because of the pandemic.
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