Metros Witnessing a Surge in Commercial Realty

May 9, 2007	(1 votes, average: 5 out of 5)  Loading ...
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Commercial real estate in India continues to extend its exposure to IT/ITes and BPO sectors.  Of 10.5 million sq ft, around 6.7 million sq ft is believed to be earmarked for IT specific projects in Noida and Gurgaon.

Rental and capital values are likely to appreciate if shortage of ready supply and high demand are to be taken into account. Properties in Gurgaon and Connaught Place have witnessed a 25% increase in sale and rental values over the past three months.

Kolkata

The emerging areas in Kolkata including Rajarhat and Salt Lake sector V have seen a fresh supply of approximately 1.35 million sq. ft.  Interestingly, the entire space is absorbed, so vacancy rates in the city are as low as 5% presently.

Indeed, real estate developers in Kolkata are planning to bring some campus developments in Bantala, a suburb in the north of the city. A 130 acre IT Special Economic Zone (SEZ) is soon to come up in the city. A multitude of companies have lined up to acquire land in Bantala.  The list includes the prominent names like Tech Mahindra, Cognizant, and Paint.  With the kind of supply coming in the city, there appeared stabilization in rentals and capital values.

Mumbai

Mumbai is expected to have an increased supply of commercial space this year. It may account for 9 million sq ft, of which 6 million sq ft has been proposed for the IT sector and 2.3 million sq ft has been pre-leased.  Blessed with fairly good infrastructure and strategic locations, Navi Mumbai and Powai are likely to witness the planned IT/ITes developments in near future.

Rentals in Worli and Nariman Point are soaring in the wake of lack of A grade supply. The figures have seen appreciations by further 20% over the last quarter.  New developments such as Ceejay House in Worli are fetching high rentals in the range of Rs 375-450 sq ft per month. The values are certainly higher than the prevailing market values in neighboring buildings.

Bangalore

Bangalore, the IT hub of India, is witnessing an oversupply in commercial real estate.  With the last year’s 3 million sq ft space, primarily in Whitefield, the total supply in Bangalore in 2007 reaches to 16 million sq ft. Of which, 9 million sq ft will be for the IT sector. Rentals in Whitefield have fallen.

The southeastern corridor along the outer ring road is to see planned developments this year. The region is likely to release a supply of 3.5 million sq ft. Of this, 1.4 million sq ft.  has been pre-leased.  A number of real estate developers have now been trying to carve out a significant niche in North Bangalore, but none of the projects have set on the course.

Chennai

Chennai real estate is rolling in the wake of upcoming developments and foray of new developers into the market. The city is likely to witness a supply of 1.2 million sq ft in 2007. Of this, 10 million sq ft is being used in suburban and central locations of the city.  The areas along the IT highway and Old Mahabalipuram Road and other suburban locations of Guindy and Perungudi are believed to be among fast flourishing IT destinations.

News Published Under:   Real Estate India |

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