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With corporates back in action with hiring, expansion and consolidation, deals for leasing office space are on the rise. Demand for office space in select metros is up by about 30 per cent.
E-commerce giant Flipkart has leased about 3 million sq ft of prime office space in Bangalore from realty firm Embassy group at an annual rent of ₹300 crore.
Last month, Delhi-based Parsvnath Developers leased out about 1.7 lakh sq ft in its office building near Connaught Place to firms such as SBI, Aditya Birla Group and Axis Bank. Pradeep Jain, Chairman of the company, expects an annual rental income of around ₹100 crore from this project.
Audit and consulting firm Deloitte is said to be scouting for about one million sq feet of office space in Hyderabad. Several other firms in the IT/ITEs sectors are hunting for space to expand business with the political climate getting better and uncertainty over the economy easing.
The Flipkart-Embassy deal is one of the biggest single-occupier leased transactions. The 3 million sq ft space will be leased out in phases with the rental in the range of ₹90 a sq ft a month for fully furnished office space, JLL India Country Head and Chairman Anuj Puri said.
Property consultancy firm CBRE South Asia said various corporate firms, which had put their office space consolidation and expansion plans on hold over the last couple of years , concluded the same during the current quarter of 2014.On an annual basis, investment-grade office space take-up has also increased by 31 per cent.
Demand drivers CBRE said that although the IT/ITeS sector continues to be the main demand driver for commercial office space, the fledgling e-commerce and pharmaceutical segments are seen to be the latest additions to the usual mix of corporate real estate occupiers across major cities.
Collier International said approximately 8 million sq ft of office space was leased across eight major cities recently. Bangalore, Chennai and Pune topped the chart in the total office market absorption.
In a report, Joe Verghese, Managing Director, Colliers International, said: “Demand-supply equilibrium will keep rents stable in most of the markets. We are observing stronger demand trends for higher quality office space.”
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