Bangalore continues to lead in commercial real estate space absorption with demand of over 13 million square feet followed by National Capital Region (NCR) with 10.6 million square feet and Chennai with 8.7 million square feet.
According to Cushman & Wakefield’s annual year-end report, country witnessed absorption of approximately 34 million square feet in the Tier 1 cities alone, with another 16.65 million square feet of pre-lease commitments in 2007, reflecting an increase of 22 per cent in demand for commercial real estate.
The year 2006 witnessed a cumulative demand of 41.46 million square feet across the seven cities of NCR, Mumbai, Bangalore, Chennai, Hyderabad, Pune and Kolkata. Prime Grade-A properties continue to be in short-supply and the demand for these has resulted in such large pre-commitments along with steady or appreciating rentals, the report added.
According to Sanjay Dutt, Deputy Managing Director, Cushman & Wakefield, “IT/ITeS has been the focus of the Indian real estate sector for the last four years and though the demand for commercial space remains consistent as compared to the previous year, the supply has increased significantly in anticipation of stronger growth and demand.”
“Moreover, the Tier-2 and Tier-3 cities like Mysore, Mangalore, Coimbatore, Ahmedabad, Kochi, Indore and Nagpur also provide lower operational costs with the Indian IT majors already venturing into them. While the impact of this is yet to be witnessed in the Tier 1 cities due to the bludgeoning demand, the future may have a different story. The retail and residential developments in the smaller cities have further added to their advantage,” he added.
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