The Seven Stars of India — India's best performing micro markets for occupiers,' a report on a joint study by the Confederation of Indian Industry and real estate advisory firm Jones Lang LaSalle Meghraj, released on Friday, has suggested that seven major Indian cities, including Pune, have witnessed warming up of the commercial realty market and this may be the right time to strike long-term lease deals as 2011 may see a sharp upward trend in rentals.The report says, in the face of severe cost pressure during 2009, both domestic and multinational players curbed real estate costs and expansion plans. The global economic recovery, along with rising software and services exports, has once again fuelled demand from the IT/ITES sector which accounted for nearly half of the absorption witnessed in the first quarter of 2010. A similar story was observed in India's 'sunshine sectors' of telecom, pharmaceuticals and manufacturing which, spurred by low rents, only provided weak, opportunistic demand for office space in 2009. The Q1 of 2010 has seen a surge in demand from the banking and financial services and telecom sectors in particular. Going forward, the IT/ITES and BFSI sectors will lead the charge as net absorption of office space is forecasted to grow 29.5 per cent from 19.6 million sq.ft. in 2009 to 42.6 million sq.ft. in 2012.
Most micro-markets are expected to reach their rental lows within the next two-three quarters, which indicates that the window of opportunity for occupiers, where balance of power favours them, continues to shrink with every passing quarter, the report says. The report lists Magarpatta, Kharadi, Kalyaninagar, Yerawada, Nagar Road, Vimannagar, Aundh and Baner as the promising micro districts in Pune. Pune excels over Hinjewadi due to better infrastructure and proximity to residential locations, presence of support infrastructure such as hotels, malls, educational and medical facilities. The city witnessed an average annual absorption of 2.2 million sq.ft. from 2007-2009 (against less than a million sq.ft. in Hinjewadi over the same time span), due to relatively larger rental correction. Encompassing major locations like Magarpatta, Kharadi and Kalyaninagar, state-of-the-art IT infrastructure, together with a well established transportation network and quality LEED certified office space (amidst bottomed out rentals) make Pune attractive.
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