Amazon Leases 1.1 Million Sq Ft Bengaluru Office for ₹6.1 Cr Monthly | Sattva Horizon Deal

E-commerce giant Amazon has reportedly signed a landmark commercial real estate agreement, securing over 1.1 million square feet of office space in North Bengaluru for a monthly rent of ₹6.1 crore. The deal, involving property developer Sattva Group, represents one of the largest office leasing transactions in the city's recent history.

Amazon's Strategic Expansion in Kattigenahalli

The US technology company has leased the entire 11-storey building at Sattva Horizon business park in Kattigenahalli, located on Airport Road in North Bengaluru. The facility, which can accommodate over 7,000 employees, will serve as Amazon's exclusive office space in the region.

Sources familiar with the deal indicated that Amazon recently signed the term sheet for the new facility, which is currently undergoing fit-out work. The first phase of operations is expected to commence by mid-2025, with the entire facility housing all of Amazon's business divisions under one roof.

Prime Location Advantages

The strategic positioning of the office near Bengaluru International Airport offers significant connectivity benefits. The location is approximately 25 minutes drive from the airport, making it an ideal choice for Amazon's operations that require frequent coordination with global teams and partners.

The area around Kattigenahalli has emerged as a mature mixed-use ecosystem, with residential properties in the vicinity commanding rents of ₹20,000-25,000 for 2-BHK units. New launch prices for similar configurations range between ₹80 lakh to ₹1 crore, indicating the growing real estate demand in this corridor.

Rental Agreement Details and Market Impact

The lease agreement comes with a 10-year term, with a 15% rent escalation clause every three years. At approximately ₹62.04 per square foot chargeable area, the rental rate is positioned at the higher end for North Bengaluru, signaling strong quality infrastructure and tenant demand in the region.

This rental rate represents a significant benchmark for India's office real estate market, potentially influencing future commercial property valuations in the area. The deal involves no upfront deposit, making it an attractive arrangement for both parties.

Investment Returns and Market Dynamics

The Amazon lease is expected to generate significant returns for investors in the region. Commercial properties in the area typically offer annual returns of around 6%, while ground-floor retail spaces command rents of ₹80-100 per square foot. Residential yields in the vicinity range between 3-4% per annum.

Amazon's Expanding Indian Footprint

This Bengaluru expansion follows Amazon's broader strategy of strengthening its presence across major Indian cities. The company has previously secured over 1.45 million square feet across Bengaluru, Gurugram, and Hyderabad through three major property deals.

In Mumbai, Amazon renewed its lease for 94,000 square feet in Vikhroli at ₹1.73 crore monthly for five years. The company also renewed a 6.76 lakh square feet lease at Constellation Business Park (Taurus 3) in Bengaluru, starting at ₹4.92 crore per month.

These office spaces serve various Amazon operations, including web services, development centers, seller services, and transportation services.

Shift from Hybrid Work Models

Industry sources revealed that Amazon initially slowed down its expansion plans due to the prevalence of hybrid work models during the pandemic. However, with the return-to-office trend gaining momentum, the company is now actively seeking additional space in Hyderabad and Chennai to accommodate its growing operations.

Implications for Stakeholders

The landmark lease agreement carries significant implications for various stakeholders in Bengaluru's real estate ecosystem:

For Developers and Investors

The deal is expected to spur redevelopment activities along Airport Road, with more Grade-A office supply anticipated in the pipeline. Institutional investor interest is likely to increase as benchmark yields stabilize in the region.

For Tenants and Employees

Amazon's presence will enhance the micro-market amenities, including cafes, transit options, and housing facilities. The influx of over 7,000 employees will create demand for residential properties and support services in the area.

For Urban Planning

The large-scale corporate presence necessitates improved infrastructure, including roads, metro connectivity, and utilities. The Bengaluru Metro's Phase II extension, which includes the ORR-KIAL corridor covering the Kattigenahalli region, will be crucial for connectivity.

Market Context and Growth Outlook

The Amazon deal comes at a time when India's office space market is witnessing robust growth. According to Knight Frank, office space transactions in the top eight markets reached 16.2 million square feet in the March quarter, marking a 43% year-on-year increase.

The return of employees to offices, driven by companies mandating at least three days of weekly office presence, has fueled demand for quality commercial spaces. This trend is particularly evident in Bengaluru's expanding tech corridors.

Future Growth Catalysts

The North Bengaluru region is positioned for significant growth, with over 25 million square feet of office space expected to be completed by Q2 2025. Government initiatives, including the Aerospace Park and the upcoming Peripheral Ring Road (PRR), are expected to further boost the area's attractiveness for businesses.

Risk Factors and Considerations

While the deal represents a positive development for the region, certain risks merit consideration. High dependency on a single large corporate tenant could pose office-vacancy risks if market conditions change. Additionally, the realization of infrastructure improvements may lag behind occupancy timelines.

Monitoring the progress of metro extensions, traffic upgrades, and water and sewage infrastructure responses will be vital for sustaining the area's growth momentum.

Industry Transformation

Amazon's decision reflects a broader shift among IT companies toward leasing rather than building their own premises. This trend is driven by the convenience of ready-to-use spaces and operational flexibility, particularly important as companies adapt to evolving work models.

The deal also underscores the growing importance of strategic location selection in commercial real estate, with proximity to airports and infrastructure becoming key decision factors for global companies.

Long-term Market Impact

The Amazon lease is expected to establish new return benchmarks for both commercial and residential investors in North Bengaluru. The transaction serves as a litmus test for the city's next growth chapter, where infrastructure development, workplace trends, and investment strategies converge.

As Bengaluru continues to position itself as India's technology capital, such landmark deals reinforce the city's appeal for global corporations seeking to expand their Indian operations. The success of this venture could pave the way for similar large-scale commercial developments in emerging corridors around the city.