Huawei

The Need

Chinese Telecom Gi ant , Huawei Telecommunications were operating out of Unitech Cyber Park, Gurgaon, scattered across multiple floors in different towers for 6 to 7 years. After a brief meeting conducted in 2011, the thought of relocation / consolidation was given by RRPL. After initial discussions, Huawei wanted to evaluate options for both- outright purchase and leasing, alongwith detailed location analysis for cost benefit.

Project Details

• Property : Spaze i-Tech Park, Sohna Road, Gurgaon
• Transaction Size : 75,000 sq.ft.
• Transaction Type : Leasing Services

Consideration Analysis

After understanding Huawei's preference towards outright purchase, RRPL studied possible complications for Huawei in buying a property and provided a detailed technical and financial analysis and cost benefit of leasing an office space as opposed to buying the premises. This was followed up by an extensive location mapping strategy conducted by RRPL for Huawei wherein the most lucrative options were proposed for their consideration. In addition to this, RRPL also proposed to take an office premises on lease wherein the landlord would invest in the capex for furnishing the same, thereby enabling the tenant to save on the initial cost of furnishing the premises.

Transformation

Having provided a detailed explanation of the financial working of a newly furnished office space where Huawei, would not have to incur the cost of furnishing and after studying the cost benefit analysis of their current facility against the new proposed premises, the following was delivered:

1. A fully furnished consolidate office (plug & play) for Huawei

(a). The landlord would incur the furnishing cost for the new office space to be taken on lease by Huawei enabling them to save almost 10 crores as an upfront expenditure.

(b). This was a major deciding factor as the company was getting brand new furnishings as opposed to their current facility at a very competitive rate.

2. Rental Advantage

(a). Huawei moved to a modern building with more efficient floor plates and at a rent which was lower than their current facility's rent.

3. Contiguous Floors in the same Tower

(a). In their current facility, Huawei offices were scattered in different floors in different towers. In the new facility, they could overcome this challenge by getting two contiguous floors in the same tower. As a result, with an extensive follow up for over 2 years and after providing Huawei extensive financial and location analysis, RRPL was able to deliver a fully furnished office space facility at highly competitive rental at no additional furnishing cost with a lease term of 9 years and a flexibility to vacate the same after the 3 year Lock in period, if need be.