Page 177 - DMGT512_FINANCIAL_INSTITUTIONS_AND_SERVICES

Financial Institutions and Services

Notes 12. Inspection by lessor.
13. Sub-leasing: prohibition or allowed.
14. Events of defaults and remedies.
15. Applicable law, jurisdiction and settlement.

Apart from the main/master lease agreement the attachments consists of:
1. Guarantee agreement
2. Promissory note
3. Receipt of goods

4. Power of attorney
5. Collateral security and hypothecation agreement.

Case Study Cos turn to Need-based Leasing of Commercial Space

Many firms going in for quarter-to-quarter short-term approach.
'Gaining ground'

IT, ITES account for nearly 80 per cent of commercial office space
Potential tenants are looking at a 6-12 month projection for renting space
Need-based leasing of IT space seems to be 'gaining ground' in commercial real estate. For
the last few years, IT firms had been maintaining a healthy bench and going aggressive on
hiring. This, in turn, meant taking a two-three year view of space requirement, and
accordingly inking specific clauses or options with developers to book upcoming space
based on business projections.

Real estate consultants now say that with global financial crisis clouding long-term business
plans and decision-making, many infotech companies and corporates are favouring a
need-based leasing of space or, at best, are taking a one-year view.

"Many companies, including IT firms, are starting to looking at a quarter-to-quarter
approach rather than taking a 12-24 month view they would take earlier. Unless these
companies get fresh commitment in the form of long-term IT contracts with their clients,
I expect them to start taking up space based on the actual requirement," Mr Anuj Puri,
Chairman and Country Head, Jones Lang LaSalle Meghraj, said.
Hard & Soft Clauses
Large tenants, he said, would earlier keep 'hard' and 'soft' clauses, with the former being
definitive agreements to take up space, and the latter more of an option for leasing space
over a slightly longer timeframe. "The soft options are out of favour in these extraordinary
times," he pointed out.
A senior official of a large Delhi-based real estate company agreed that potential tenants
were looking at a one-year projection when it came to renting space. "It is definitely a
more short-term view, and it is logical given the current scenario. The impact of this on
real estate developers is not monetary, but more in terms of a reduced visibility in space

Contd...

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