Bangalore topped the list of commercial real estate usage - it absorbed around 9 million sq ft in 2007 - over 4 million square feet short of its actual demand for the year, according to Cushman & Wakefield 's annual year-end report. The national capital region of Delhi came in second with 10.6 million square feet followed by Chennai with 8.7 million square feet
Anurang Mathur, Deputy MD, Cushman & Wakefield said, “Most of the demand comes from IT/ITES sector and Bangalore has lead for the last 3 to 4 years in the demand for this industry and hence in the office market as well. Now it has a critical mass and good breath hence we expect it to continue to do well.”
But the face of the Bangalore commercial real estate market looks all set to change. Reason -the city is facing a large space crunch for commercial property in the central business district. Commercial property rates that rose by 10-15 percent last year are expected to increase similarly this year; especially after the opening the new airport.
Mathur said, “This is airport is very far from the current airport and CBD and there is a lot of land and opportunity available for commercial development between the airport and the city. We will see plenty of action in those areas and all that real estate will change.”
The opening on the new airport is expected to change the dynamics of Bangalore’s commercial real estate market, areas like Indiranagar, airport road and the inner ring road that flourished until now because of their proximity to the current airport may witness a drop in interest levels
Nevertheless industry experts are bullish on Bangalore’s commercial market. They don't expect to see a situation of over supply for at least two years.
Commercial real estate (in million sqft)City Demand Absorption
Bangalore 13.32 8.7
NCR 10.6 6.6
Chennai 8.7 6.4
Mumbai 4.5 1.4
Source: Cushman & Wakefield Annual Report
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