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The average age difference (time or period taken for development) between central business district (CBD) and secondary business district (SBD) has widened in major cities. But tech cities have held on to it with a narrow age gap.
Tech-concentrated
“Across Indian office markets, secondary business districts (SBDs) are not only the younger cousins of the central business districts (CBDs) but also has emerged the new favourites due to the more modern buildings that suit requirements of corporates and office buildings that can be upgraded into superior grade-A assets,” Ramesh Nair, CEO and Country Head, JLL India, told BusinessLine.
At present the age difference is 28 years in Mumbai and 12 years in Delhi. In Pune, the difference is seven years, Bengaluru and Hyderabad have a gap of five years. Kolkata is at two years and Chennai is at one year.
In Mumbai’s case, the age difference between the SBD, Bandra Kurla Complex, and the original CBD, which is the Nariman Point and Fort area, is a staggering 28 years. “No wonder the CBD has shown a decline in rents in recent years compared to all other micro-markets in Mumbai and corporates have shown consistent preference for the SBDs, especially BKC,” explained Nair.
Preferred destination
Similarly, the difference between Delhi’s CBD vs SBD (Gurgaon Prime) is more than 12 years. Gurgaon is the preferred destination for corporates and MNCs whereas the CBD (Connaught Place) is preferred mostly by Indian firms and those having to liaison more with the government. Some of the more well-known names in Delhi’s CBD are expected to move to AeroCity.
As for setting up their Indian head offices is concerned, Bengaluru has emerged an IT and entrepreneurial hub. Interestingly, the age gap between CBDs vs SBDs in this IT hub is lower at five years, compared to Mumbai and Delhi, while Hyderabad has an age gap of five years and Pune has a difference of seven years. “Other cities, which saw more office space come up especially in the last 12-15 years are younger markets overall, which explains the lower age gap between their business districts,” said Nair. He further added that “In some of these cities, especially Bengaluru, the CBD still has many pull factors unlike Mumbai and Delhi’s CBDs.”
Talking about Bengaluru, Nair said: “The age gap in Bengaluru’s case is only five years as both the CBD and SBD started seeing developments around the same time.”
While Kolkata has the smallest grade-A office footprint in India, Chennai mostly has industrial parks with relatively lower demand for grade-A office spaces.
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