Personal Finance

Office space market sizzles in Pune

Alka Kshirsagar | Updated on February 26, 2011

RealPUNE   -  The hindu

The proliferation of industry and small and medium businesses in Pune has generated a growing demand for non-IT office space. Saturation in the Central Business Districts of yore – JM Road, Deccan Gymkhana, Fergusson Road and M G Road – has led to the emergence of several secondary business districts in Aundh and Baner (western corridor), Koregaon Park/Boat Club Road, and Shanker Sheth Road.

According to Mr Mufaddal Malubhoy, Head of Sales, Realtors Estate Consultants, the area currently emerging as the hot spot for new commercial spaces is the eastern corridor covering Viman Nagar, Hadapsar, Kharadi and Kalyani Nagar.


The reasons are quite clear, he points out. “The airport is close by and access to the property is easy thanks to Ahmednagar Road which is perhaps the widest in the city,” he says.

“Another thing in favour of the eastern corridor is the availability of large virgin land parcels that make possible big buildings with large floor plates ,” Mr Malubhoy adds.

Mr Mohammed Aslam, City MD for realty firm Jones Lang LaSalle, Pune, says,“SMEs are preferring eastern Pune to western part due to connectivity and social infrastructure.”

Gap to widen

Pune as a market in office space sector has done well in 2010. Office space absorption in 2009 was 1.8 million sq ft, while in 2010 it almost doubled to 3.5 million sq ft and demand has increased for 2011. New supply is planned, but developers have not started construction so the gap will widen in the next two years.”

Given this backdrop prestigious projects are under way in the Eastern belt. The largest by far is the Phoenix Market City from the Phoenix Mills Group - promoters of the upmarket High Street Phoenix in Mumbai. It is pegged to create 3.3 million sq ft of commercial space (a mix of retail, hospitality, food and beverages, entertainment and office space) when fully completed. The first phase will be ready in a couple of months with 120,000 sq ft of office space.

“While the supply of office space in Pune is reasonably good, there is a shortage of quality supply,” avers Mr Tushar Mehta, Director, Phoenix Market City, Pune.

Marvel Realtors, which operates in the premium and luxury segment, is also constructing three new projects in the Viman Nagar-Hadapsar area. Marvel Edge a 10-floor building in Viman Nagar that will create 10 lakh sq ft of commercial and retail space and house a boutique hotel as well. Work on the Rs 1,000-crore project has begun, and it will be completed in two years' time, Ms Jasmine Bagmar, Sales head for the company, says.

Mr Aiman Mehta, Vice-President, Sales and Marketing for Clover Realty, reveals that small offices — 2,000-4,000 sq ft in area - are moving very well.

The company is also coming up with projects in the Viman Nagar area. The first has two buildings (ground plus first floor) with 12,000 sq ft each. A second office building has been planned as part of the Clover residential project, Concordia.

Shift to lease model

Traditionally the model has been one of outright sale of property, and the costs in this region are between Rs 6,000-7,500 per sq ft, depending on the features of the project.

However, MNCs which are gaining in presence in Pune, are propelling a shift to the lease model. Rentals are today between Rs 45-55 a sq ft.

Published on February 26, 2011

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