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Source: Jones Lang LaSalle

India office real estate: A tale of the suburbs

India is rapidly urbanizing and the skylines of the country's metropolises are changing quickly with the building of skyscrapers and modern architecture.

India is rapidly urbanizing and the skylines of the country's metropolises are changing quickly with the building of skyscrapers and modern architecture. The smaller towns too are metamorphosing in unprecedented ways through the expansion of transportation networks, the creation of central districts and parks and by numerous residential projects.

Many cities have been transformed and Ahmedabad is most illustrative of them. Even before the metro rail link between Ahmedabad and Gandhinagar has sprouted tracks, Gujarat International Finance Tec-City (Gift City) phase I (10 million sq ft) has already rolled out its construction plans.

However, all these big changes have not been caused by irrational enthusiasm - they are indeed necessary, given the influx of people to the towns and the needful creation of employment. As existing CBDs have become saturated, India’s commercial real estate markets have grown in terms of both the density of existing business districts and the emergence of new ones.

During the past decade, India's commercial property segment has been witnessing a steady rise in demand for office space and the impact of the GFC is now waning. All this activity is credited to the significant shift within the country from developing average-quality commercial space to building superior-quality projects with advanced amenities that support the business environment. Also, the on-going infrastructure initiatives are aimed at transforming the suburban areas into successful commercial centres.

The recently conducted Jones Lang LaSalle India CFO survey revealed that approximately 68% of the companies surveyed are planning to expand their operations in the next five years. These companies may prefer to shift to suburban locations because by doing so they will be able to reduce their real estate costs and move into superior quality projects, which are available at lower rents and offer modern amenities, car parking and safety.

The banking, financial services and insurance (BFSI) sector dominates the CBD market due to its willingness to pay higher rents, whereas IT/ITES occupiers dominate the suburban market in terms of occupancy due to the availability of larger office space areas and because the nature of their business makes them vulnerable to higher real estate overhead costs.

Suburban locations are home to the majority of office real estate occupiers and will have a growing role in determining the performance of the country's office market. The absorption of office space in the country totalled 26.7 million sq ft in 2012 with suburban locations accounting for more than 60% of the total, or 16.6 million sq ft.

This is forecast to increase further to 68%, or 19.2 million sq ft in 2013. These growing real estate activities in suburban locations of India provide evidence of a shift in gravity towards this market.

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Property rates
  • Residential
  • commercial
Mumbai
Capital Values Rate/Sq ft (INR)
Aajiwali
3000 - 5000
Ambernath
3000 - 5000
Badlapur
1000 - 3000
Bhandup (West)
11000 - 13000
Chembur (East)
15000 - 17000
Chembur (West)
11000 - 14000
Dombivali (East)
4000 - 6000
Ghatkopar
13000 - 15000
Heeranandani Gardens Estate - Powai
25000 - 30000
Hiranandani Gardens Estate - Powai
25000 - 30000
Kalyan (East)
2000 - 4000
Kalyan( West)
3000 - 5000
Karjat
1000 - 3000
Khandala
8000 - 10000
Kharegaon
5000 - 7000
King Circle
17000 - 28000
LBS Marg
12000 - 15000
Lonavala
3000 - 5000
Mulund (East)
11000 - 14000
Mulund (West)
11000 - 14000
Mumbai Nasik Highway
3000 - 6000
Powai
15000 - 17000
Senapati Bhagath Singh Road
3000 - 5000
Sion (East)
18000 - 21000
Sion (West)
17000 - 22000
Tilak Nagar
12000 - 22000
Ulhasnagar
3000 - 5000
Vikhroli
11000 - 14000
4 Bunglows
17000 - 28000
7 Bunglows
13000 - 23000
Chandivali
10000 - 15000
Malad (East)
12000 - 14000
Versova
21000 - 24000
Airoli
4000 - 8000
Belapur
6000 - 9000
Ghansoli
6000 - 8000
Kalamboli
4000 - 9000
Kamothe
4000 - 6000
Nerul
7000 - 10000
Palm Beach Road
12000 - 15000
Panvel
3000 - 6000
Sanpada
8000 - 10000
Sea Woods
8000 - 10000
Ulwe
3000 - 6000
Uran
3000 - 6000
Vashi
9000 - 12000
Altamount Road
62000 - 72000
Breach Candy
62000 - 74000
Chowpathy
48000 - 58000
Colaba
42000 - 46000
Cuffe Parade
67000 - 69000
Dadar(East)
32000 - 34000
Dadar(West)
29000 - 32000
Lower Parel
32000 - 34000
Mahalaxmi
38000 - 40000
Malabar Hills
68000 - 75000
Mumbai Central
23000 - 34000
Napean Sea Road
66000 - 74000
Parel
26000 - 34000
Prabhadevi
37000 - 39000
Tardeo
41000 - 49000
Worli
36000 - 41000
Andheri (West)
18000 - 20000
Andheri(East)
15000 - 17000
Bevarly Park
5000 - 7000
Bhayander (East)
5000 - 6000
Bhayander (West)
3000 - 5000
Boisar
1000 - 3000
Borivali (East)
11000 - 13000
Borivali (West)
10000 - 14000
Dahisar
4000 - 8000
Goregaon (East)
13000 - 17000
Goregaon (West)
12000 - 14000
Kandivali (East)
12000 - 14000
Kandiwali (West)
11000 - 12000
Malad(West)
9000 - 14000
Mira Road
5000 - 7000
Naigaon
1000 - 4000
Nala Sopara (Eastt)
3000 - 5000
Nalasopara (West)
3000 - 5000
Poonam Nagar
6000 - 8000
Shanti Nagar
7000 - 9000
Shrishti
6000 - 9000
Vasai Road
1200 - 4000
Virar
1000 - 3000
Note: Price trend are based on asking rate and not necessarily on the transaction date
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