According to a recent research made on the corporate real estate, Bengaluru seemed to lead the demand for corporate real estate spaces among the top seven cities in India in the year 2015. The report stated that, the demand for ‘Grade A’ office space among top seven cities in the country rose up to 18%, which touched an all-time high demand of 38 million square feet in 2015.
But what has to be noted is that, out of 38 million square feet, Bengaluru led the race with the share of 32% (12.2 million square feet) driven by the demand from traditional IT and new ecommerce companies. Even in 2014, 33 million square feet was the total office space absorption in which 34.2% was contributed only by Bengaluru.
India – Established Outsourcing Destination
Anshuman Magazine, the managing director of CBRE (Real Estate Services Firm) said in an interview that, India has been a favourite outsourcing destination for many multinationals who wish to outsource their operations to major cities in India, and this has been a main reason for the sustained spurt in office transaction activity. This combined with the positive market sentiment and macro-economic climate, has encouraged office space occupier demand in the year 2015.
Areas in High Demand in Bengaluru
The micro markets of Bengaluru which saw a major increase in office absorption include Electronic City, Whitefield, Jayanagar, JP Nagar and Sarjapur Outer Ring Road (ORR) stretch. In Electronic City and Whitefield, the transactions were mainly driven by IT/ITes companies for small and large sized office spaces, but in ORR region, the demand was mainly because of ecommerce companies.
Rental Appreciation on Quarterly Basis
The report also said that, the Outer Ring Road (ORR) region witnessed the completion of three prominent Special Economic Zones (SEZ) and commercial investment grade projects. Also, the sustained demand from occupiers and limited availability of quality spaces resulted in the rental appreciation of about 1-2% on a quarterly basis across both SEZ and IT segments.
Looking at the reports, Ram Chandnani, the managing director of transaction services at CBRE South Asia said that, the corporate occupier demand for office spaces seems to continue its growth in the coming months also. According to him, the consolidation and expansion strategies of corporate agencies will continue to be in the Greenfield projects whereas the pre-committed space will be in under-construction projects, and it seems to be true if we go with the statistics.
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