Pune excels over Hinjewadi!

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.

To read more, please, visit The Times of India

Office rentals in Pune real estate market drop by 5 per cent - Report

The rentals in the CBD of National Capital Region, Bangalore, Hyderabad and Kolkata remained constant; whereas in Mumbai and Chennai, the rentals dropped by three per cent and in Pune by five per cent owing to limited leasing activity.

The market report also adds that over the past quarter, the office real estate market has shown an uptrend in terms of level of enquiries, which more positively has also resulted in enhanced deal velocity.

Whilst the IT/ITeS sector has been slower to get onto the recovery path, corporate office space take-up has been quite encouraging; FIs, FMCG and Telecom sectors have all contributed to the same.

As supply has overtaken demand facilitating increased competition, better quality developments are attracting demand.

To read more, please, visit Office rentals stable: Report

Office property market yet to beat slump

The office property market, which was hit hard in the aftermath of the global economic slowdown, will take at least a year to come out of the slump as demand for offices is still subdued, say fund managers, consultants and realty developers.

Office market is still in shambles and it is primarily dependent on economic growth. Since companies in banking and financial services are not expanding into various geographies, there is no fresh demand. Existing tenants are renegotiating rents.

Infotech and ITES sectors consume over 50 per cent of office supply in the country, but since the global economic slowdown, IT/ITES companies have also scaled back their plans due to lower business from the US and European clients.

To read more, please, visit Business Standard