With the India growth story remaining intact, Bangalore’s MNCs and corporates like HSBC, Mercedes Benz, Schneider, HUL, Capgemini and GE continue their expansion programmes with a thrust on striking a bargain deal in the process. Bangalore’s overall absorption of office space for the year is likely to touch 9 – 10 million sq ft, according to market sources.
“The intention to expand in the city is a clear indication of the growing level of confidence among corporates and MNCs. And Bangalore will continue to retain its dominant role as the city with the largest absorption of office space in the country for many years”, says Ram T Chandnani, Deputy Managing Director, CB Richard Ellis, South India.
At the same time corporates have also started evaluating tier II cities to attract local talents vis-à-vis suburbs in tier I cities in particular for data processing jobs, say industry sources. This is expected to keep the high end jobs in tier I cities.
There are others who are cautiously optimistic in the current scenario. “Aggressive corporate business plans will always be double checked over and above the traditional route in order to ensure that they do not commit additional space,” says Juggy Marwaha, Director, Leasing, RMZ Corp. With the rentals holding steady, the absorption trends look positive for the city, he added.
There are not many ready to occupy space in areas like outer ring road and North Bangalore, according to market sources. Due to limited space availability, corporates are scouting for other locations in order to meet their future requirements. Bangalore’s office market will continue to witness limited space absorption for some time due to non-availability of ready to move in space. Corporates looking for BTS format in South Bangalore include V M Ware, Oracle, etc. Industry sources say that Oracle is evaluating expansion of their existing operations in the city.
If the current trend is any indication then the demand for BTS format may inch up next year as there is no supply in the desired locations for corporates. The city may become a market for BTS format office buildings next year, predict industry experts in Bangalore.
Though ready to move in space is available on Hosur road and electronic city, property consultants feel there is limited opportunity for further growth which is one reason for the shifting of their requirements towards outer ring road and Whitefield. And outer ring road still continues to be the favoured destination among corporates though the costs are gradually inching high. As most of the clients are expanding they have no other choice but to occupy existing spaces made available by the clients or else they will have to go to micro markets like Whitefield. In fact, Whitefield is becoming the preferred hub for space occupiers, according to realtors and most of the corporates are now favouring Whitefield due to the inherent cost advantages while setting up operation in the area. Prestige group’s Shanthiniketan is getting 60-70 per cent leased now, say realtors.
The increase in the number of residential projects being developed by the lead developers on old Madras road and the improvement in infrastructure and connectivity level, augur well for the corporates to shift their operations towards Whitefield. Areas that will continue to rivet the attention of corporates for office space include outer ring road. As the under pass and flyover gets completed, Whitefield and North Bangalore will become the sought after locations for corporates.
Rentals for office space in the city range from Rs 45 to Rs 50 per sq ft for SEZ premises and Rs 42 – Rs 45 per sq ft per month for non-SEZ premises. Whereas in Whitefield, rentals revolve around Rs 30 per sq ft per month as the benchmark rate.
According to industry sources, Infosys is committing SEZ premises in Bagmane Tech Park and CTS has committed 700,000 sqft at Manyata Embassy Business Park. While Infosys has acquired 100,000 sq ft in Bagmane Tech Park, TCS is buying 35 acres of land in Whitefield to set up their own SEZ.
0 comments:
Post a Comment