Pune will be a 100 million sq. ft. office space market in around two years, Anshuman Magazine, chairman and CEO – India, South-East Asia, Middle East & Africa, CBRE, said. The office space in the city is currently at 84 million sq. ft. This is large for a city of Pune’s size, Magazine said. Office space in Pune was higher than in many global cities, he added.
According to real estate consulting firm, CBRE South Asia, office leasing in Pune is projected to touch almost seven million sq. ft. the highest in the last six years and a year-on-year growth of 13%. Pune is currently the sixth-largest office market in India.
The availability of land banks was driving this growth, enabling the development of expansive office campuses and providing a diverse selection of high-quality assets at competitive rates. This combination is proving highly attractive to businesses seeking expansion or relocation opportunities, he said.
According to Magazine, Pune and Chennai were the few cities in the country with a strong manufacturing industry base and a growing services sector presence. Pune had the advantage of attracting talent from all over the country. Pune’s skilled workforce makes it a highly attractive destination for companies seeking to establish or expand their presence in India, he said. “This confluence of advantages solidifies Pune’s position as a premier real estate destination within the country, attracting both investors and occupiers,” Magazine said.
The cost of living is relatively low compared to Delhi, Mumbai and Bengaluru, there was ease of living and a better quality of life in Pune, he said. Last year, around 6.5 million sq. ft. of office space was added, which was one of the highest in the world.
The manufacturing industry, services sector, global capabilities centres and back offices that set up operations in the city have done well and attracted more occupiers, he said. especially large blue-chip MNC firms, Magazine said.
The growth momentum will continue with more GCCs setting up operations here. Flexible workspace operators captured a significant portion of leasing activity in Pune. For the manufacturing sector, faster access to ports in Mumbai for exports and closeness to the Mumbai market was a pull factor.
According to CBRE, the city’s strategic location, favourable demographics and improving business environment had driven foreign investment inflows in Pune. The investments in Pune grew to $ 374 million in 2023 as compared to $ 269 million in 2022.
Demand for office space in Pune is spread across prime areas, including Aundh, Baner, Balewadi, Kharadi and Viman Nagar, among others, with each zone absorbing nearly 1.5 million sq. ft. New players, such as Prestige and Salarpuria, and institutional investors such as Mapletree, entered the market, further fueling activity.
The city’s talent pool and competitive real estate market remain major draws for IT companies with Tata Consultancy Services, Infosys, Wipro, and Accenture establishing campuses within the city. Office space demand was expected to remain stable in the first half of 2024, with a potential upswing in the latter half.
