Bengaluru office real estate market has something to cheer about as a new study showed that the vacancy levels in this IT city is at all time low. A study by JLL further added that Bengaluru has the lowest vacancy level among seven major office markets in the country.
Bengaluru office vacancy level stood at slightly more than 3 per cent, followed by Pune and Hyderabad with vacancy levels of 6 per cent and 9 per cent, respectively. Chennai comes next with vacancy level at 12 per cent, followed by Kolkata and Mumbai where the vacancy level stood at 19 per cent. Among the 7 major cities, Delhi-NCR had the highest vacancy level at almost 32 per cent. In comparison, the average vacancy in commercial real estate stands stood at 15 per cent across country in the second quarter of 2016.
The lowest level in the city shows a healthy supply-demand equilibrium along with occupier demand remaining strong. The study also said that developers in the city have remained attuned to market dynamics so far with any new supply that has been made available by them to the occupiers here has been taken up quickly by the latter.
“The time to supply more quality space has, however, arrived and developers in Bengaluru need to look into addressing the existing space crunch. Some developers have rightly started advancing completion of their commercial projects in the city. Given the community’s reputation of having their ears to the ground, this trend is expected to be followed by other developers in the coming months,” Ashutosh Limaye, national director – research, JLL India said.
With the good news on the office market front, Bengaluru has some challenge also to deal with as pointed out by the study. “While talent availability and the scale of its thriving IT ecosystem have been helping Bengaluru, there is a risk of the city losing its ‘numero uno’ position if the pace of infrastructure upgrade is unable to keep up with changing skyline. A wake-up call has come in the form of occupier demand shifting from Bengaluru’s established IT corridors to newer ones like the Northern corridor that have better infrastructure,” the study said.
This indicates that the city needs to catch up with timely augmentation of infrastructure to avoid demand moving within the city from moving out altogether. The new signal-free corridors and metro routes planned become all the more important, therefore, and need to be completed within stipulated deadlines.