SBDs Emerge As New Favourites For
Office Occupiers
Age gap between CBDs and SBDs is widest in
Mumbai and Delhi-NCR
by Mr. Ramesh Nair, JLL India
Across
Indian office markets, secondary business districts (SBDs) are not only the
younger cousins of the central business districts (CBDs) but also emerging as
the new favourites due to the more modern buildings that suit requirements of
corporates and office buildings that can be upgraded into superior grade-A
assets.
A look
at different office markets shows how striking the average age of a city’s SBD
vis-Ã -vis its CBD is. For e.g., in Mumbai’s case, the age difference between
SBD-Bandra Kurla Complex (also called the de-facto CBD) and the original
CBD of Nariman Point and Fort area is a staggering 28 years.
No
wonder the CBD has shown decline in rents in recent years compared to all other
micro-markets in Mumbai and corporates have shown consistent preference for the
SBDs, especially BKC.
Similarly,
the difference between Delhi’s CBD vis-Ã -vis its SBD (Gurgaon Prime) is more
than 12 years, which is considerable. Gurgaon is the preferred destination for
corporates and MNCs whereas the CBD (Connaught Place) is preferred mostly by
Indian firms and those having to liaison more with the government. Some of the
more well-known names in Delhi’s CBD are expected to move to AeroCity.
In
Pune, the difference (of seven years) is still higher than that in other
tier-I, II cities. While Mumbai and Delhi have been the traditional favourites of
most Indian companies and MNCs – at least as far as setting up their Indian
head offices is concerned, Bengaluru too, has emerged as an IT and
entrepreneurial hub in recent decades. Interestingly, the age gap between
CBDs and SBDs in IT hubs is lower compared to Mumbai and Delhi.
|
City
|
Average age of CBD
office stock (current, in years)
|
Average age of SBD
office stock (current, in years)
|
|
Mumbai
|
38
|
10
|
|
Delhi-NCR
|
21
|
8.8 (Gurgaon Prime)
|
|
Pune
|
15
|
8
|
|
Hyderabad
|
20
|
15
|
|
Chennai
|
10
|
9
|
|
Bengaluru
|
25
|
20
|
|
Kolkata
|
8
|
6
|
Source: JLL REIS
Other
cities, which saw more office space come up especially in the last 12-15 years
are younger markets overall, which explains the lower age gap between
their business districts.
In
some of these cities, especially Bengaluru, the CBD still has many pull factors
unlike Mumbai and Delhi’s CBDs. The age gap in Bengaluru’s case is only five
years as both the CBD and SBD started seeing developments around the same time.
Like
Bengaluru, Hyderabad too has an age gap of five years only between its business
districts but the average age of its CBD (at 20 years) is five years younger
than Bengaluru’s CBD.
Kolkata
(at 2 years) and Chennai (at 1 year) both have some of the lowest age gaps
between their respective business districts. While Kolkata has the smallest
grade-A office footprint in India, Chennai mostly has industrial parks with
relatively lower demand for grade-A office spaces.
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