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Demand for Grade A office space is on the rise across cities in India, says Anuj Puri, Chairman, ANAROCK Property Consultants. Excerpts from a chat:
Are builders looking to humanise office buildings by offering amenities and services — borrowing a leaf from co-working spaces?
If we consider trends across commercial spaces, developers are getting innovative in providing state-of-art amenities to their clients (corporates, etc.) and yet being cost-effective. They realise the growing demand of the working millennials and how companies are adhering to their wishes. Therefore, they are trying to humanise office buildings and, rather than competing with co-working spaces, they are looking to cater to both sets of clients in their facility — large corporate houses as well as co-working spaces, the new poster boy of commercial office spaces. For instance, many large IT parks are also leasing office space to co-working players because they feel that it lends them an advantage of having the right tenant-mix.
Any other trends in office spaces in India?
With commercial REITs becoming a reality in India, developers are now looking to leverage the underlying opportunities. As is, PE funding for commercial projects is on the rise. As per ANAROCK data, PE funding in commercial segment has seen a phenomenal rise over the last four years — from total PE inflows of $905 million in 2015 in the commercial sector, it has increased to $2.8 billion in 2018. Besides getting an exit from the concerned project/s it will help them address their funding issues, if any, and give them an option to stick to their core of doing construction rather than post-delivery management of large office spaces.
What about pricing trends?
As per ANAROCK data, nearly 10 million sq ft of new commercial supply is expected to come up in the entire NCR in 2019, a yearly increase of a whopping 75 per cent. This supply includes a major office space spanning 2.5 million sq ft in Gurgaon by realty major DLF.
Out of this total supply, nearly 6.9 million sq ft is expected in Gurgaon, followed by 2.9 million sq ft in Noida and the remaining in CBD areas.
The average monthly rentals for commercial spaces in entire NCR as of 2018 stood at ₹77 per sq ft, which remained unchanged against 2017. However, the average monthly rentals in prime office locations across NCR could see a rise in 2019 by as much as 3-5 per cent.
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