South India’s data centre market is on an impressive growth trajectory, with major cities like Chennai, Bangalore, and Hyderabad at the forefront. This surge is supported by substantial government incentives, strategic infrastructure investments, and a rising demand for digital services. The region is poised to play a crucial role in the global data centre landscape, with capacity projected to grow 65% by 2030.
The report also highlights that Bengaluru has cemented its status as the leader for global capability centres (GCCs), commanding a 41% share in India’s GCC leasing market (from 2022 to Jun’24). Bengaluru’s GCC growth is driven by a combination of factors, including a skilled talent pool, premium Grade-A assets, and a well-developed IT ecosystem. The city’s ease of doing business also contributes significantly, making it an attractive destination for GCCs. Additionally, the scope of scalability in both assets and talent resources further reinforces Bengaluru’s position as a leading commercial hub.
ICRA estimates the industrial and warehouse logistics park (IWLP) supply to grow by 13-14% YoY in FY2025 in the eight primary markets to around 424 million sq. ft. Moreover, the absorption is estimated to increase to 47 million sq. ft. in FY2025 (90% of incremental supply addition) from 37 million sq. ft. in FY2024, supported by strong consumption-led demand. The vacancy in the eight primary markets stood at 10% in FY2024 and is likely to remain at a similar level in FY2025.
Development completions of about 13.2 mn. sq. ft. was witnessed in Apr-June ‘24, up by 49% Q-o-Q, and 11% Y-o-Y. Bengaluru, Mumbai and Hyderabad drove supply addition during the quarter with a cumulative share of about 69%. The non-SEZ segment dominated development completions with a share of 90% in Q2 2024. Developers continued to exhibit their efforts towards sustainability, with over three-fourths of the newly completed space during Q2 2024 being green-certified (LEED or IGBC-rated).
The survey showed a trend towards diversification in the office sector, with a preference for expanding portfolios across multiple cities. This trend is driven by factors like a skilled workforce, improving infrastructure, cost-effectiveness, government support, and the benefits of exploring new geographies. Apart from the major cities like Bangalore, Hyderabad, NCR, and Mumbai, occupiers are particularly interested in expanding in Chennai and Pune. India’s strong economic growth is fueling investments across various sectors, leading to increased demand for diverse office space requirements. While gateway cities continue to see growth in office space demand, Pune and Chennai are witnessing a surge in both office leasing activity and new office space supply.
A comprehensive analysis of these cities was done involving assessment of various social, economic, financial, and real estate specific demand & supply side parameters. Colliers conducted a broad-based assessment and developed an objective framework incorporating the above-mentioned parameters to assess their relative degrees of importance and impact on various real estate segments such as office, residential, warehousing, retail, hospitality, and alternatives (data centers, senior living, second homes etc.) in the respective cities.
Owing to rapid industrial growth and the emergence of one of the fastest growing real estate segments in the country, India’s warehousing sector is set to cross the 300 million square feet (MSF) mark by 2025, according to a report jointly launched by CREDAI and CRE Matrix. Currently, the overall Grade A warehousing stock stands at 216.2 MSF. In Q1 CY ’24, India witnessed a 5% increase in rentals – reflecting how India’s warehousing demand continues to surpass supply – with the absorption to supply ratio standing at 1.4 in the quarter.
When you read in the media that the housing market is on fire, you get pessimistic with FOMO (Fear of Missing Out) gripping your investment strategy. When the market speculators suggest the house price might drop, you rush to sell and/or put your buying decision on hold for a better deal. Track2Realty analyses whether home buyers can time the market.
Nationwide, market rentals across Grade A spaces continued to increase, nearing the INR 100 per square feet milestone, with an 8.7% QoQ increase in Q1 CY 2024. The disparity between market and existing rental rates expanded to approximately 14%, signalling a robust landlord-centric market environment. Specifically, Bengaluru, Pune, and Hyderabad experienced an uptick in rental rates during Q1 CY’24 compared to the preceding quarter.
It was conceptualised to clean the opaque ecosystem of Indian real estate; was touted to be the biggest reform of the sector; and expected to enhance the home buyers’ confidence index. But seven long years after the enactment of the Real Estate Regulatory Authority (RERA), it has still not evolved as a stamp of trust for the harassed home buyers. RERA’s tryst with trial & error has not only dented the confidence of the home buyers but also lent credence to the perception that complaint with RERA rather gives an edge to the builders. After all, RERA has been relegated to be the balancing act for both the builder and the buyer. A Track2Realty analysis.