Home / ANALYSIS / Business / Managing the right of return

CB Richard Ellis found that the slowdown has not only foiled expansion plans, but also put a squeeze on the burgeoning rental space.
[More Images]

1. CBD (MG Road, Kalyani Nagar, Koregaon Park, Bund Garden, Dhole Patil Road)

The CBD continues to be a preferred destination for non-IT commercial office space users. However, this scenario may change in the next few months as approximately 500,000 sq ft of Grade-A commercial office space would be available the CBD by Q4 2008 onwards.

2. Off CBD (Viman Nagar, Magarpatta, Aundh, Baner, Shanker Seth Road, Senapati Bapat Marg, Nagar Road)

An incremental addition to the IT/ITeS sector has slowed down due to decrease in volume of transactions and enquiries. Developers have adopted a wait-and-watch policy. With requirement for Grade-A commercial space in demand, developers are now concentrating on this segment. Also, there has been an availability of furnished, second generation IT/ITeS space in the off-CBD locations. This has been on account of existing occupiers moving to the peripheral markets or newer projects due to expansion.

3. Peripheral Business District (IT Corridor Hinjewadi, Hadapsar, Talawade & Kharadi)

About seven SEZ projects have been launched or are under construction in the peripheral locations. However, in light of the current slowdown, a few developers have deferred their decisions to commence construction. Though the completed SEZ projects have seen high levels of absorption, there could be an increase in vacancy levels in future. Developers are likely to reduce rental values in a bid to attract companies.

Story continues below

Advertisement

COMMENT Comment on this article

1. CBD (Chowringhee, BBD Bag, Park Street, Camac Street)

The CBD locations of Kolkata are the first choice for corporate offices and this has been the reason for negligible vacancy levels. However, with increased number of companies preferring the peripheral markets on account of lesser real estate costs and better connectivity, there has been a mild slowdown in the uptake of space in these locations in the recent times. Rental values have been stagnant and in some cases landlords are willing to discount on the quoted rentals.

2. Secondary Micro-markets (Em Bypass, Kasbagariahat, Sarat Bose)

The secondary micro-market has not witnessed any notable office space absorption in the recent quarters. Values here have remained largely stagnant.

3. Peripheral Markets (Salt Lake and Rajarhat)

This market was planned to house most of the IT/commercial setup and has been severely impacted by the controversy arising out of the Singur (Nano plant) issue. There has also been a substantial supply of IT & ITeS space and take-up has been low.