The office market in Bangalore continues to drive demand from corporates and MNCs looking for additional space in the wake of consolidation and/or expansion of their existing operations. Though the US meltdown has impacted the commercial property market sentiment, property developers are not unduly worried and are feeling confident that there is no negative sentiment as of now.
The demand for office space continues to remain steady. In fact there is no quality built space available either in CBD areas or on the outer ring road in the city. Even the future supply is likely to enter the market only by 2012. As a result the downside of outer ring road is turning positive for Whitefield. This is because Whitefield is the only location in the city where large floor plates and areas are available for those companies seeking expansion of their existing operations. There are leasing deals happening at Rs 27-Rs 29 per sqft per month now, according to realtors.
The flexibility in rent free period is also gaining momentum. According to industry sources, property developers are nowadays offering three months as rent free period for occupiers to enable them to complete fitouts. However, this facility is available for those clients whose leasing requirement is large to a minimum extent of 100,000 to 200,000 sqft.
Considering the current market trend and the likely absorption in the coming months, the year end office space absorption will touch 8-9 million sqft, feels Juggy Marwaha, Director, Leasing, RMZ Corp. This makes Bangalore the undisputed leader in the country as the city with the largest office space absorption consecutively for years together now. This also goes to prove the confidence of investors and corporates to retain the city for their expansion requirements.
According to property consultants, a few companies are still in the process of consolidation and are evaluating opportunities. There are others who are looking at additional space for expansion of their existing operations. As a result the demand for office space continues to remain steady in and around the city. However, the infrastructure bottlenecks continues to pose a formidable challenge to the city’s authorities. Even though TDR was given and got sold it was not utilised appropriately, feel leading developers.
As far as SEZ premises are concerned, there is a demand but a number of projects are still in the construction stage. The demand for SEZ is emerging only from companies who have already established their presence in SEZ. There are no new corporates who are looking at SEZ now in view of the growing uncertainty over the fiscal benefits once the General Sales Tax comes into force, feel property developers.
According to industry sources, to ease the parking woes, set back areas can be allowed for elevated parking at least in the rear portion of the commercial building. This will enable utilisation of the existing roads for vehicular movement without any hindrance. “A pragmatic policy involving the industry’s stakeholders is needed to address the parking woes so that the garden city’s commercial buildings will be able to function more efficiently”, feels Hajee Abdul Sattar Sait, Managing Director of Safina Towers.
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