Office Supply in Micro Markets on; Set to Surge as Demand Soars
Source : ETT / https://economictimes.indiatimes.com/industry/services/property-/-cstruction/office-supply-in-micro-markets-set-to-surge-as-demand-soars/articleshow/92045683
Golf Course Extension Road (GCER), Southern Peripheral Road (SPR) and Noida Expressway in the National Capital Region, Electronic City in Bengaluru and Navi Mumbai are the most price-effective office markets in India with average monthly rents less than a dollar per square foot, according to international property consultant Savills. As occupiers re-evaluate office portfolios with a significant focus on competitive pricing. GCER and SPR with sub-dollar rentals and availability of quality office space have emerged as micro markets of choice, Savills India said in a report, titled Dollar-Edge Rental Office Markets in India. Driven by the IT-BPM segment on competitive pricing, GCER and and infra push, Delhi-NCR’s suburbs SPR with sub-dollar rentals and are among the most preferred cost-availability of quality office space effective rental markets in India.
“Anticipated infrastructure upgrade, high traction in office and residential real estate and significant upside potential have strengthened the micro market of GCER, SPR and Noida Expressway to a large extent. Despite the pandemic and its advers impact these micro markets have witnessed newer developments, space take-ups and are expected to withness supply infusion in years to come,” saide Shweta Sawhney, managing director dro Delhi-NCR at Savills India. Driven by the IT-BPM segment and infra push, Delhi-NCR’s suburbs are among the most preferred cost-effective rental markets in India. With sub-dollar rents, GCER and SPR offered rental arbitage of 74% as compared to premium locations.
These micro markets currently offer high-quality office space of about 15 million square feet, with an estimated supply addition and leasing of 6.3 million sq ft and 5.1 million sq ft, respectively, in the next three years.
Global capability centres of MNCs, as well as companies including Cargill, Stryker, Grupo and Bimbo have taken up office spaces in the recent years in these micro markets. In Bengaluru, Electronic City continues to be an
affordable choice for cost conscious occupiers operating on a “$1 real estate cost strategy”, the report said. Electronic City is likely to witness cumulative space take up of 2-4 million sq ft in next five years.
The market offers high-quality office space of 8.7 million sq ft, with an estimated supply addition of 2.5 million sq ft in three years. Average rentals,
meanwhile, are expected to remain range-bound in the near future.
Over 70 acres of contiguous land parcels have been identified for future development by leading developers in the region. “Improved demand and availability of targeted real estate products coupled with infra boost and
significant affordability of real estate verticals have played the driving factor in the evolution of this micro market,” said Arvind Nandan, MD (research & consulting) at Savills India.