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IT, Non-IT Rental Gap Widens in India
The rental gap between IT and ITes office space and others is widening as per the latest report by real estate consultant Jones Lang La Salle, leading to a severe supply crunch for the non-IT segment.
The rental gap, the report says, between the two space types in the same or similar locations, was widening due to the relatively lower development of non-IT office stock, that has led to a severe demand-supply mismatch, increasing the rentals for non- IT office space, both grades A and B, to unprecedented levels in a record timeframe.
IT and non-IT space across India’s major cities ranges from a low of Rs 10 to 20 per sq feet respectively per month in the tier II cities of Pune and Hyderabad to a high of Rs 40-60 in tier I cities of Delhi and Mumbai.
Over the last six years rentals have been growing at a differential rate of 9.4% and 16.5% for non-IT space respectively, resulting in a widening gap between the two.
The trend is present in all the major cities across the country. Around 47 million square feet of space in the IT/ITES sector would be added in the next two and a half years, while the non-IT space addition is pegged at only 12 million for the same period, thus further increasing the already wide gap between the two rentals.
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