According to a recent Cushman & Wakefield report, Bangalore emerges as a clear preference for sectors such as office and retail, while hospitality comes a close third.
Bangalore will soon overcome the slowdown of the last two years in the commercial real-estate segment , when demand for office space had dipped severely.
With the IT/ITeS sector back on the path of recovery now, the city is again emerging as a preferred destination for multinational companies wanting to set foot in India or expand their existing operations . Demand for office space in the country's IT capital is expected to gather pace in the next few years.
“The expected recovery in the IT/ITeS sector would have a positive effect on the demand in Bangalore, the preferred location for many IT/ITeS companies. It is expected to see the highest demand for office space within 2010-2014 of approximately 42 million sq ft,” it says.
On the other hand, demand for retail space is also expected to be the highest in Bangalore with approximately 7.6 million sq.ft, while demand in the hospitality sector is expected to be 9.8 million room nights and in residential, it is expected to be approximately 2.3 lakh units over 2010-14.
Mr Manish Aggarwal, Executive Director - Investment Services, Cushman & Wakefield India, explains that the overall demand for commercial office space is subdued in comparison with the supply, which is estimated to be approximately 400 million sq.ft during 2010-14, “implying caution and the need for quality supply at the right prices”.
However, Bangalore, which holds the largest share of the demand pie, will be the only city where the demand would exceed supply over the next five years, he says. “This is essentially because requirements of IT companies are much larger than most other sectors and the city, for long, has been the preferred IT destination.”
Though the city is facing a scenario of oversupply now, good deals are taking place, says Mr Vineet K. Singh, Business Head, 99acres.com. According to him, about 10 million sq.ft of ready-to-move-in office space is currently available in the city, and more supply is expected in the immediate future. But in the medium-term perspective, “we expect a robust demand because India's growth story is still intact,” he says.
Mr Ram Chandani, Deputy Managing Director - South India, CB Richard Ellis (CBRE) India, points to an increase in demand from end-user occupiers and also absorption in the city's central business district (CBD) area. The supply has been very limited, he explains, adding that “whatever has come in has been occupied in the CBD”.
Apart from North Bangalore, one micro-market that will also see a surge in office space development is Whitefield, he adds.
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