Bengaluru leads in the office market
Apart from the IT/ITeS sector, engineering and manufacturing companies as well as co-working operators too are seeking more space in the Garden City, according to a report. Shrinivas Rao gives an overview of the real estate trend across the country
With several technology occupiers continuing to expand in the city, Bengaluru remained the foremost office destination, recording approximately 3.70 million sq. ft office space absorption during the third quarter of the year. This was highlighted in ‘Connect Q3, 2018’ – the quarterly newsletter of Vestian, a real estate facility management services provider.
While IT/ITeS sector dominated leasing activity during the quarter, the demand for office space was progressively accounted for by other sectors too. This includes transactions by engineering and manufacturing companies as well as co-working operators who continued to scale up their space requirements in order to capture market share and cater to the growing demand from corporates.
Despite dearth of ready office space, office markets along the Outer Ring Road (ORR) accounted for the highest share of absorption. The shrinking vacancy level of the region has led IT/ITeS occupiers to explore pre-commitment options. This is expected to remain the norm in the forthcoming period as well, till more supply is added to the market. Besides the ORR, the peripheral office markets, primarily towards the north and the suburban markets in Koramangala, saw substantial leasing transactions. The new supply in Q3 2018 amounted to approximately 2.1 million sq. ft, that included project completions deferred from previous periods.
Bengaluru saw its new residential launches dip by 28% in Q3 2018, as compared to the figure in Q2 2018. The number of new launches were recorded at a subdued 6,425 units spread across various micro-markets, particularly towards the northern region including Jakkur, Hennur, Yelahanka and Thanisandra Road, owing primarily to the region’s rising popularity as an office destination and its proximity to the International Airport.
An interesting trend observed regarding the new launches has been the concentration of projects in the mid-end and affordable housing category. A large share of the new launches were in the range of ₹40-70 lakh. Capital values of completed as well as under-construction projects continued to remain steady without observing any major change.
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