The CP story is very old, one that spans about 50 years or more. It was NCR’s central business district (CBD). It is still probably the CBD. But office space in CP is stagnated. The new business districts such as Cybercity, GCR, Aerocity and GCE are growing at a rapid pace, meeting an enormous demand for commercial office space. Now, it’s a tale of two cities- Delhi and Gurgaon.
MMR has been one of the major retail hubs in the country with most brands, big and small, eyeing to capture a piece of this vital market. The unrelenting demand for more retail space in the financial capital has prompted mall developers to boost their development pipeline. As per ANAROCK data, nearly 13.6 mn sq. ft. of new mall space is likely to come up in the entire MMR by 2022.
There is a public perception that what has transformed this once non-descript city into thriving metro city is the gulf money since a large number of Kochi residents are working in the gulf region. However, Kochi property market is not being driven by gulf money alone; this could be only a reality in the luxury segment.
Affordable housing was given the much-coveted infrastructure status, and the very definition of affordable housing has been tweaked to accommodate more inventory under this key category. Moreover, the previously highly speculative markets of NCR and MMR have been tamed and are, in fact, leading the thrust of affordable housing today.
The greener pastures are mostly defined with numbers and not execution capabilities or business model. For example, the absorption of office space has been upwards of 40 million square feet per annum for the last 3 years. The overall sentiments in this segment look bullish with PE investors also putting in money. As a matter of fact, even in retail real estate the PE investors are bullish and exploring even the Tier II cities having malls with good footfalls, brand mix and strong sales. This is what is enticing the residential developers looking for both the buyers as well as the capital investments.
Gross leasing activity is recorded at 50 million square feet in 2018, highest in last eight years driven by buoyant leasing in Bengaluru and NCR. Compared to the previous year, gross leasing increased by 17% as occupiers continued to expand and consolidate. The top 3 sectors contributing to gross leasing were IT-ITeS with 43%, flexible workplaces with 14% and BFSI with 12% share.
The gross leasing activity in India was recorded at 36.4 million sq ft for the first nine months of 2018, up 26% YoY. Pan-India demand for Grade A office space was driven by the technology sector (48%) in Q3 2018, followed by banking and insurance representing 19% of the total leasing volume.
The report also recommends the best urban locations for technology firms. Bengaluru, Singapore and Shenzhen stand out as top choices for starting or expanding technology operations in Asia. Modest long-run growth prospects hold down developed cities like Tokyo and Taipei for the sector. While emerging cities offer high growth potential and low operating costs, they tend to score lower on employment criteria and human aspirational metrics.
Analysts active in Navi Mumbai firmly believe that this NRI has got more than one upcoming node in Navi Mumbai where he can invest. Interestingly, the upcoming nodes have been more holistically planned and promise to have better infrastructure.
As per Colliers International, the overall absorption for H1 2018 now stands at ~ 24 million sq ft. Bengaluru (Bangalore) continued to account for the highest share of absorption at 34% in Q2, followed by the National Capital Region (NCR) at 28%, Mumbai at 14%, Hyderabad and Chennai at 8% each, Pune at 6%, and Kolkata at 2%.