Sev­eral of­fice deals in the pipe­line, 0.75 mil­lion sq ft to be sold: Re­port

Hindustan Times (Chandigarh) - Estates - - NEWS - Ravi Ahuja ht­spe­cial­pro­jects@htlive.com

Although leas­ing mo­men­tum slowed in Q2 2017, de­mand for com­mer­cial space is ex­pected to so­lid­ify in sub­se­quent quar­ters, ac­cord­ing to a re­cent re­port by re­alty con­sul­tancy Col­liers In­ter­na­tional.

The re­port states that the out­look for the of­fice mar­ket is op­ti­mistic as there are sev­eral deals in the pipe­line amount­ing to 0.75 mil­lion sq ft (70,000 sq m) which are likely to close in the up­com­ing months.

There will be di­ver­si­fied oc­cu­pier de­mand and dis­place­ment from CB Dare as in the up­com­ing quar­ters. Of­fice trans­ac­tions gained mo­men­tum in H1 2017, with a gross ab­sorp­tion of 2.9 mil­lion sq ft till date in the Mum­bai com­mer­cial mar­ket.

Although the bank­ing and fi­nan­cial ser­vices sec­tor has al­ways dom­i­nated the leas­ing scene in Mum­bai, an in­creased trac­tion has been wit­nessed from lo­gis­tics, ship­ping, tourism, ed­u­ca­tion, me­dia, health­care and phar­ma­ceu­ti­cal com­pa­nies. Some other oc­cu­piers with in­ten­si­fied de­mand in­clude data cen­tres, co-work­ing op­er­a­tors and ware­hous­ing com­pa­nies.

At the back of up­com­ing sup­ply in And heri, Na vi Mum­bai and LBS, we also ex­pect leas­ing ac­tiv­ity to be con­cen­trated mostly at these lo­ca­tions.

There is a strong sup­ply pipe­line of 4 mil­lion sq ft (372,000 sqm) in up­com­ing quar­ters, adds the re­port. Other lo­ca­tions like BKC and Gore­gaon with ready of­fice stock are also likely to gar- ne r some in­ter­est from oc­cu­piers.

In most cities in­clud­ing Mum­bai, com­mer­cial ac­tiv­ity has wit­nessed dis­place­ment from the CB D lo­ca­tions and ten­ant pref­er­ence has de­vi­ated to­wards pe­riph­eral and SBD lo­ca­tions.

Ac­cord­ingly, the high­est leas­ing mo­men­tum was wit­nessed in the Western sub­urbs which ac­counted for a 33% share in the over­all leas­ing vol­ume. Other SBD lo­ca­tions like cen­tral sub­urbs and cen­tral Mum­bai con­trib­uted 21% and 14% re­spec­tively to the to­tal trans­ac­tion vol­ume, while pe­riph­eral area like Navi Mum­bai ac­counted for a 22% share.

On the other hand, prime busi­ness dis­tricts like Nari man Point, Ma­rine Lines, Fort and BK C rep­re­sented a mere 10% share in the to­tal trans­ac­tion vol­ume. Ac­cord­ing to Col­liers In­ter­na­tional, ten­ants would con­tinue to move to­wards mar­kets with qual- ity Grade A sup­ply and af­ford­able rents.

Although a few premium es­tab­lish­ments con­tinue to de­mand some of the high­est rents in the­coun­try, over all rental val­ues in Mum­bai are slated to re­main sta­ble. Sim­i­larly, sub­dued in­vestor ac­tiv­ity and lim­ited out­right pur­chases should keep a check on cap­i­tal val­ues in the city.

The long-awaited Metro III that passes through most ma­jor com­mer­cial hubs in the city has fi­nally com­menced its con­struc­tion. We be­lieve that planned and up­com­ing in­fras­truc­ture devel­op­ments would play in favour of the com­mer­cial real es­tate in Mum­bai. Go­ing for­ward, we ex­pect a pos­i­tive out­look with im­proved leas­ing ac­tiv­ity in the fi­nan­cial cap­i­tal. The au­thor is ex­ec­u­tive di­rec­tor for of­fice ser­vices and in­vest­ment sales at re­alty con­sul­tancy Col­liers In­dia

HT FILE

There will be di­ver­si­fied oc­cu­pier de­mand and dis­place­ment from CBD ar­eas in the up­com­ing quar­ters.

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