Office space demand in Bangalore to top supply: JLL India

BANGALORE: Bangalore is staring at a shortfall in office space this year, with demand pegged at 10 million sq ft while supply is expected to be 8-8.5 million sq ft.

Barely 4-5% of Bangalore's total stock of 96 million sq ft of grade-A non-captive office space is available on lease, according to real estate services firm JLL India.

“The trend of leasing remains strong...around 4 million sq ft was leased in the first quarter of 2016 alone. This includes a good volume of pre-committed space, which will be occupied over the next two to three years,“ said Anuj Puri, chairman of JLL India.

In 2015, Bangalore saw transactions for about 15 million sq ft of office space. The demand was driven by the IT-ITeS companies looking to expand their businesses and footprint in Bangalore. E-commerce firms and corporate offices of manufacturing firms were also actively seeking spaces on rent in the city.

“This is likely to continue in 2016 as well. Although space will be occupied by other sectors too, it will predominantly be the technology centres of those companies,“ JLL India said in a recent report. Sustained demand for office space has consistently driven commercial real estate growth in the city that crossed a milestone in mid-2013, becoming the first Indian office hub to join the global club of markets with 100 million sq ft office space. Bangalore-based Nitesh Estates, which has a five-year platform deal with Goldman Sachs to invest Rs 1,600 crore in income-generating assets, plans to focus on office space more than on residential segment. owing to the huge demand from companies.

“We have already tied up some land parcels for the same. Around 30% of the portfolio money will go into buying retail assets while the rest is for commercial assets acquisition,“ said Nitesh Shetty, chairman of Nitesh Estates.

The city has around 40 million sq ft of real estate space in different stages of planning and construction which is expected to come up in the next five years.