With three transactions in as many months, demand for large leases in Mumbai is picking up. The three months to September also saw five transactions being closed out in the Delhi-NCR region. While UBS is said to have moved into 1.30 lakh square feet space in Gigaplex in Airoli at around R70 per sq ft per month, Teva Pharmaceutical is understood to have taken up 1.25 lakh sq ft space on lease in Commerz II in Goregaon at around Rs 150 per sq ft per month. Industry sources said Tata Communications occupied 1 lakh sq ft in Crescenzo in Bandra Kurla Complex (BKC).
Bengaluru remains a popular office destination; the city reported the highest volume of large lease transactions in the June-September period, locking into 11.5 lakh sq ft, data from Colliers show. In the January-March period, Bengaluru had seen the highest leasing volumes in Asia Pacific on the back of big-ticket transactions.
At slightly more than 3%, vacancy vacancy levels here are at an all-time low but Ashutosh Limaye, national director (research), JLL India , cautions that the thriving IT ecosystem notwithstanding, the city might lose its ‘numero uno’ position if infrastructure isn’t upgraded.
“Demand is shifting to newer IT corridors in the north where the infrastructure is better. The new signal-free corridors and planned metro routes are crucial and must completed within deadlines,” Limaye said.
Infosys is understood to have closed out 2 lakh sq ft space in Bhartiya City while Google is said to have leased 1.5 lakh sq ft in Constellation Business Park for around Rs 65 to Rs 85 per sq ft per month. Global financial services software firm Misys is also said to have signed on 1.5 lakh sq ft space in Constellation Business Park.
Meanwhile, Pune’s office market saw just one large lease signed in the July-September period with 2.4 lakh sq ft being occupied. Quality supply remains scarce here and is not scheduled to come in until Q3 2017 so large deals are unlikely for some time. ZS Associates has occupied 2.4 lakh sq ft space in World Trade Centre in the Kharadi micro market.
Surabhi Arora, senior associate director (research), Colliers International, believes the e-commerce, healthcare and technology spaces will result in higher occupancies and that demand could outstrip supply in IT-driven markets such as Pune, Bengaluru and Hyderabad. “With the business confidence index rising and the macro environment improving, demand should pick up,” Arora observed.
Rents, however will remain stable in most markets with quality properties commanding a premium.