by Mr. Karan Khetan,
JLL India
India is rapidly
urbanizing and the skylines of the country’s metropolises are changing quickly
with the building of skyscrapers and modern architecture.
The smaller towns too
are metamorphosing in unprecedented ways through the expansion of
transportation networks, the creation of central districts & parks and by
numerous residential projects.
Several cities have
been transformed & Ahmedabad is most illustrative of them. Even before the
metro rail link between Ahmedabad & Gandhinagar has sprouted tracks,
Gujarat International Finance Tec-City (Gift City) phase I (1 crore square
feet) has already rolled out its construction plans.
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| Karan Khetan, JLL India |
Creation of
Employment..!.
However, all these
big changes have not been caused by irrational enthusiasm - they are indeed
necessary, given the influx of people to the towns & the needful creation
of employment.
As existing CBDs have
become saturated, India’s commercial real estate markets have grown in terms of
both the density of existing business districts and the emergence of new ones.
During the past
decade, India’s commercial property segment has been witnessing a steady rise
in demand for office space and the impact of the GFC is now waning.
All this activity is
credited to the significant shift within the country from developing
average-quality commercial space to building superior-quality projects with
advanced amenities that support the business environment. Also, the on-going
infrastructure initiatives are aimed at transforming the suburban areas into
successful commercial centres.
Jones Lang LaSalle
India CFO survey..!
The recently
conducted Jones Lang LaSalle India CFO survey revealed that about 68 % of the
companies surveyed are planning to expand their operations in the next 5 years.
These companies may
prefer to shift to suburban locations because by doing so they will be able to
reduce their real estate costs & move into superior quality projects, which
are available at lower rents & offer modern amenities, car parking and
safety.
BFSI, IT / ITES
Sector..!
The banking,
financial services and insurance (BFSI) sector dominates the CBD market due to
its willingness to pay higher rents, whereas IT / ITES occupiers dominate the
suburban market in terms of occupancy due to the availability of larger office
space areas & because the nature of their business makes them vulnerable to
higher real estate overhead costs.
Suburban locations
are home to the majority of office real estate occupiers and will have a
growing role in determining the performance of India’s office market. The
absorption of office space in the country totaled 26.7 million square feet in
2012 with suburban locations accounting for more than 60 % of the total, or
16.6 million square feet.
This is forecast to
increase further to 68 %, or 19.2 million square feet in 2013. These growing
real estate activities in suburban locations of India provide evidence of a
shift in gravity towards this market.
About the author..!
Mr. Karan Khetan is
Senior Analyst (Research & REIS) at Jones Lang LaSalle India
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