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With an estimated 40.4 million square feet of office space, Whitefield, Bengaluru’s second-largest office sector, is expected to experience an 8–10 per cent increase in rental prices over the next two years, driven mostly by rising demand as a result of improved metro connectivity, according to a report.
Recently, the metro line towards Whitefield became partially operational and will connect the technology hub of Whitefield to the rest of the city.
Also read: Bengaluru leads in office space transactions in Q1 2023: Report
The metro project in Bengaluru, i.e., the Baiyappanahalli-Whitefield Metro Project, will most likely be fully operational by mid-year, which is estimated to push the rental prices of office spaces in Whitefield, states a report by Colliers. Similarly, growth in rentals will also hinge upon overall occupier demand, macroeconomic factors, and more.
Although the vacancy levels in the area are around 17.2 per cent as of Q4 2022. However, the metro project is likely to boost occupier activity in the region, with enhanced accessibility and reduced commute times.
Also read: Office leasing could touch 35 to 38 million sq ft in 2023: Colliers-FICCI report
“Improved connectivity, such as efficient and reliable public transportation options, can attract more businesses to set up offices in previously inaccessible or inconvenient to reach. With better connectivity, companies can benefit from a larger pool of potential employees who can commute to their offices easily and efficiently. Moreover, better connectivity can also help businesses reduce operational costs, particularly in transportation and logistics,” said Arpit Mehrotra, Managing Director, Office Services - South India and Head of Flex India.
The average annual supply in Whitefield rose by 10 per cent during 2017–22, as the construction of the metro project began, when compared to the 2011–16 period, according to the report. Gross leasing in Whitefield rose 18 per cent during the metro construction stage (2017–22) compared to the planning stage (2011–16).
Also read: Office lease rentals to remain under pressure near-term on new supply, global slowdown: Report
In the CBD, over the last 12 years from the time of the metro project’s construction, about 64 per cent of total leasing has happened during the metro operation stage (2017–22). Moreover, the office supply in the CBD rose more than four times during the operation stage (2017-22), led by the expected improved connectivity of the metro.
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