Bangalore sees highest proportion of company relocations

Relocation and consolidation of companies to suburban or cost-efficient locations is on the rise.

The total relocations across top eight cities in the first half (H1) of 2013 was at 5.46 million square feet which was 2.5 times higher compared to the same period last year and is one-third of the total leasing activity, said Cushman & Wakefield, a global real estate consultants in its latest report.

“The markets have seen a large number of corporate relocating and consolidating their operations within a city to locations with quality construction with space scalability options at rentals lower by as much as 15-30 per cent. IT/ITeS saw major relocations across the top eight cities to peripheral locations. Other key sectors such as BFSI and Consulting to name a few moved to suburban locations within the cities,” Ritesh Sachdev, Executive Director, Tenant Strategies & Solutions, Cushman & Wakefield.

During H1 2013, Bangalore recorded the highest proportion of relocations with a substantial increase of more than three times when compared to the same period last year. Companies relocated from CBD/Off-CBD locations such as MG Road, Millers Road, Vittal Mallya Road and Residency Road to peripheral regions such as the Outer Ring Road.

In the National Capital Region, office occupiers opted to relocate from prime locations in Delhi to Gurgaon as well as within Gurgaon with the rental differentials in the range of 20-30 per cent translating to cost advantage to the occupiers.

Hyderabad also saw active relocations from CBD/ Off-CBD locations such as Banjara Hills Road No. 1, 2, 10 & 12; Begumpet, Somajiguda etc. given the non-availability of Grade A space to suburban locations of Madhapur and Gachibowli with relatively lower rentals by approximately 10-11 per cent.

Relocations in Mumbai have increased substantially in the first-half of 2013 compared to the same period during 2012 with companies relocating from CBD locations such as Nariman Point, Ballard Estate, and Churchgate etc. to larger office spaces in locations such as BKC and Andheri-east at rentals lower by approximately 55-65 per cent. With IT/ITeS companies expanding to peripheral locations, FMCG, Pharma and Media companies opted for relocations to larger space at attractive rentals in the suburban locations of Mumbai such as Andheri-East, Jogeshwari and Powai.

Chennai recorded steady increase in relocations in H1 2013 compared to the same period last year with relocation activity concentrated in locations such as suburban-Guindy and suburban- Perungudi Taramani providing quality spaces with more avenues for scalability at rentals lower by approximately 20-30 per cent than prime locations within the city.

Pune saw active relocations by the manufacturing and BFSI sectors besides the IT/ITeS sector during HI 2013. This is mainly due to the availability of well maintained quality spaces in the Suburban and Peripheral micro markets such as Viman Nagar and Hinjewadi with comparatively lower rentals by approximately 35-50 per cent as compared to the CBD and Off CBD areas such as Bund Garden Road, Senapati Bapat Road etc thereby facilitating the expansion and relocation plans of various companies.

Kolkata registered a huge increase in the relocations recorded during the first half of 2013 with majority of the relocations in 2013 noted within the Salt Lake micro market wherein occupiers mainly from IT/ITeS sector leased out larger office spaces at rentals lower by approximately 5-7%.

Relocations in Ahmedabad have been low during the first half of 2013 given the preference of most end-users to buy office space instead of leasing within the city.

>anil.u@thehindu.co.in

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