Bucking the national trend, Pune recorded an increase of 37 percent in absorption of office space. Banks and financial services have been betting big on the city. Despite that, the city does suffer from oversupply. CNBC-TV18's real estate show 'Prime Property' exhibits Cushman & Wakefield's report on property trends in key Indian cities.
Ravi Ahuja, executive director, Cushman & Wakefield said, "Nagar Road will do well. Some reputed developers such as Marvel and Panchshil at Kharadi made some very good constructions in the Western corridor. In Hinjewadi, developers such as Wadhwa’s, DLF, Embassy have been there. They give excellent quality amenities and good opportunity for staff welfare in their own campuses. These are some of the growth corridors, which will shape the future and see some multiple fold growth."
Chennai’s commercial property market is as stable as the residential market. There are no expectation of any major price appreciation or depreciation. Banks and financial services like Chennai for non-voice BPOs and data centres.
Ahuja feels, “Taramani are fetches a premium and corporates love to be there right upto Perungudi. That stretch is prime and goes between Rs 50-60 square feet a month. Right upto 15-20 kilometers stretch at OMR from Taramani right upto Navalur or Siruseri, is a clear growth corridor.”
“Next one is in Chennai being a very industrial hub is a location called Ambattur, Ambattur has been in a very traditional industrial location yesteryears and that has been converting itself into a new found IT hub.”
“Overall, the GST Road Ambattur, as well as the OMR Stretch may have about 8-10 million square feet of ready vacant space. So, I don’t see prices really go up that rapidly over the next 2-3 years. It is a long haul.”
Bangalore has disappointed with absorption dropping 22 percent in the first half of the year. The slowdown in the IT sector is what has resulted in the poor performance of Bangalore's commercial realty market. We asked where investors should and should not bet on in Bangalore.
Ahuja said, “The South East corridor of Whitefield it is still oversupply situation, it is always an oversupply situation for the last 3-5 years. Three million square feet is lying vacant and ready for offer. So, one should stay away from such areas. On the Outer Ring Road, which was always due to lack of supply always in demand, has suddenly seen some huge amount of space in the market over the last two or three quarters.”
“The stretch between Sarjapur and Marathahalli and from Marathahalli to the KV Puram are really the next growth corridors. Outer Ring Road, the Sarjapur Road and Hebbal, which is going to shape up due to the international airport and the connectivity it provides towards the North”, adds Ahuja.
The National Capital Region (NCR) including Gurgaon and Noida has had a rough ride with absorption dropping 40 percent. New grade-A buildings in New Delhi's Connaught Place, like that of Parsvnath are commanding a high rent of Rs 300 per square feet. So corporate continue to flock to the suburbs.
“The CBD of Gurgaon, the Cyber City where DLF has its flagship have rentals hovering between Rs 60-65 per square feet. It offers both IT as well as non-IT and even some of the special economic zone (SEZ) products, which Unitech offers in that market”, Ahuja elaborates.
He adds, "Corporates are looking at expanding and relocating further away towards Sohna Road where the rentals are far more reasonable between Rs 35-40-42 per square feet a month. The upcoming corridors of Manesar, which are today found to be a little remote, will see some offtake in activity and absorption over a period of time where rentals are far lower than Rs 30 a square feet a month."
"Noida has its different catchment and a locale altogether in terms of locations. The Noida Expressway is one of the prime most and yet very reasonably priced compared to Gurgaon. Some of the other sectors in Nodia like Sector-32 and few others have been gaining some good traction and absorption from corporates."