The talk of Hyderabad taking on Bangalore to wrest the IT capital crown is now passé. Hyderabad performed miserably in 2010 in office space demand, led mainly by the IT industry. But that is no consolation for Bangalore.
The talk of Hyderabad taking on Bangalore to wrest the IT capital crown is now passé. Hyderabad performed miserably in 2010 in office space demand, led mainly by the IT industry. But that is no consolation for Bangalore. It will have to deal with a new threat, Pune, which has topped among Indian cities in registering the highest office space demand last year, says the annual Cushman and Wakefield global research report on office space demand.
In 2010, the highest growth in rental values was recorded in Pune (11%) followed by Bangalore (10%) and Mumbai (6%). Pune saw a growth in demand as stability returned to the economy with many IT/ ITeS companies looking at securing office space in the city. Excellent infrastructure and connectivity, lower rental (compared to other IT/ITeS locations) were among other factors that contributed to the rise in demand in Pune. The Delhi market for office space proved stagnant with zero growth.
As for Bangalore, its tempo of growth was led by Central Business District (CBD), unlike in the past, when the south or north of Bangalore proved the attraction. This change is linked to Metro which has raised people's expectation of better connectivity. Of course, it is still less than 13% growth of the pre-meltdown period of 2008. Not surprisingly, leading developers like Century, Prestige, Embassy and Brigade have ongoing top-end office space projects in the CBD area.
The global recovery was led by the Asia-Pacific region where rents increased by 8% over the year. China led the league and India was an integral part of this growth story where rentals increased in the range of 5% to 15% in major micro markets across the leading commercial centres of India.
Arvind Nandan, executive director, Occupier Services Cushman & Wakefield, India, says: “Most markets started to witness a growth in rental values for commercial spaces in 2010. Mumbai and Hyderabad are the only locations which are yet to see growth. This growth is expected to remain positive for a few quarters, though some caution would continue to be exercised by the occupiers. This cautious approach will mean that rental-value growth pattern will be on pace to 2010 and in some locations, may even hold steady.”
“Let’s not beat the drum in self-exultation,” says K Sridhar, chairman of Builders Association, Karnataka (Bangalore) Centre, striking a sobering note.
“Weather is the winner. Next to the friendly weather is the availability of trained human resources. But if you consider infrastructure facility, Bangalore can’t beat Hyderabad. With Metro set to make commuting easier, the situation would improve for Bangalore,” Sridhar said. Top developers and builders knew the trend, it seems. Most of the top 10 developers in the city have of late given a shift to office space. This is a departure from the traditional home providing.
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