In 2015, more than 10 million sq ft of office space got occupied and another two million sq ft of leasing was done in under-construction projects
Even as corporates are staring at a severe supply crunch of quality Grade A office space in Bengaluru, property developers are rushing in to complete their projects ahead of schedule this year. According to property consultant JLL India, at least three projects located along Lavelle Road and Sarjapur Road are partly operational and ready for fit-outs from the fourth quarter of 2015 beating their original completion schedule by 2-3 quarters.
This is most probably due to these developers taking note of the existing situation in the sector, especially on the back of strong pre-commitments and demand for office space, Ashutosh Limaye, national director, Research, JLL India said.
“In the next few quarters, more under construction projects are expected to follow suit as more developers could start aiming for faster completion of their commercial projects given the strong absorption trends”, he said.
In Bengaluru, vacancy is a mere 4-5% across its office space of more than 90 million sq ft. In 2015, more than 10 million sq ft of office space got occupied and another 2 million sq ft of leasing was done in under-construction projects. Although there is demand for 10 million sq ft, supply of only 8-8.5 million sq ft non-captive office space is expected to come up in 2016. “Developers in Bangalore are known to be nimble footed and we may see more “ahead of time” completions of office projects in near future to meet strong demand the city demonstrates,” Limaye said.
Showing faith in India’s economic growth, corporate occupiers have been in expansionary mode, especially in major cities. So high is the demand for quality commercial spaces in the city that 2015 proved to be a historic year as demand overtook supply.
Vacancy has been steadily going down. Riding on the back of reducing supply and lowering vacancy, rents have also been rising in grade-A properties across cities. Even Grade-B buildings in good locations would see more leasing activity in this scenario, Limaye added.