Zomato Moves Out of Pricey Gurgaon Office

10/20/2018
Publication The Economic Times

Online restaurant listing startup Zomato is checking out of the most prominent address in Gurgaon, One Horizon Centre, as the rent for the DLF-owned property is seen as high.

The firm is relocating to Vipul Tech Square on the Golf Course Road, said two people with direct knowledge of the development. "Zomato has taken up around Ilan sq ft spared over three floors. It plans to have its new-year party in the new office that is being fitted out now," said one of the two sources.

In 2015, the Gurgaon-based firm had leased 1.2 lakh sq ft of office space at 2135 per sq ft per month in One Horizon Centre and operated its headquarters out of there. Zomato was paying more than ! 1.6 crores per month for the facility.

"The office space that Zomato rented was working out to be very expensive for them. So they are relocating. The firm is also in talks with flexible office operators to move some of its operation there," said one of the people. "In the past two years, it had surrendered 75,000 sq ft office space in DLF's property, before deciding to relocate. It winnows pay a rent of no per sq ft," said the person.

Zomato didn't respond until press time on Friday to an email seeking comment.

Many startups have relooked their real estate strategy to cut cost. While big firms like Flipkart moved to new campuses consolidating their operations, small ones have either cut down on real estate or moved to co-working spaces due to lower costs and flexibility.

In the largest flexible office transaction in the country, food-delivery startup Foodpanda is expected to sign up two lakh sq ft of co-working space in Delhi. "There is an increasing demand for good quality space with demand for small office space expected to further pick up in future," said Gurpreet Singh, director at officeon-rent.com.

Earlier this month, Ant Financial, Alibaba's payment affiliate, invested $210 million in Zomato, even as its battle with Swiggy intensifies in the food-delivery market. Zoma-to, which is valued it at about $1.1 billion based on the Ant Fin investment, claims that it is the largest food delivery startup and has hit a 21 million monthly order run rate in India in September.

According to real estate consultancy CBRE, leasing in the Delhi-National Capital Region continued to be driven by small-to-medium-size transactions with Gurgaon dominating in activity. Some of the mid-size transactions included TechMahindra renting 1 lakh sq ft, Landis+ GYR taking up 1.021akhsqft and Hero MotoCorp leasing 18,000 sq ft in Gurgaon.

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