A client was setting up an IT enabled services outfit. As per projections, the staff strength was 150 to start with and was to be ramped up to 400 over two years. The client required about 20,000 sq.ft. to start with, scaleable to 45,000 in 12 - 18 months. Initially the client was looking at a building of about 45,000 sq.ft. in the main business area @ Rs. 50 per sq.ft per month (a rental of Rs. 2.25 Million per month). The nature of activity was such that it was not essential to be in the central business area. Looking at the requirements, we suggested them to look at alternative locations, a little away from the main business center. We located and identified a site about 7 to 8 kms. away @ Rs. 15 per sq.ft. in a building under construction. We negotiated the deal in a way that the client had immediate possession of about 22,000 sq.ft and another 23,000 over 6 to 12 months. We also negotiated a right of first refusal for another 16,000 sq.ft. in the same building just in case the client outgrew the available infrastructure. In this manner we were able to substantially reduce the operating cost of the client (to almost 30%) as also one time security deposit payable to the lessors, which is generally 10 times the monthly rental.
