Pune: Office spaces were always high on demand in Pune because of the mushrooming of IT companies. However, recently no such adding up of new information technology organizations has been witnessed, culminating in the saturation of demand. Few selective locations are still in demand for rental spaces for offices but overall the situation has stabilized. The total absorption of office space will be approximately four million sq ft during 2012, despite a perceived slowdown of economic activity globally and in India, the experts said.
Quarterly report for July-September 2012 by C B Richard Ellis (a real estate consultancy company) revealed that, existing vacancy levels and lower demands have resulted in a steep decline in supply addition across most leading cities of the country. About five million sq ft of office space was completed in the third quarter of 2012, compared to more than nine million sq ft in the previous quarter, with a decline of about 47% on a quarter-on-quarter basis.
In Pune’s Central Business District (CBD) of M G Road, Koregaon Park, Bund Garden, Kalyaninagar, Dhole Patil, F C Road and J M Road, an increase in transaction activity was observed as compared to the previous quarter. Real estate advisors Jones Lang LaSalle said the supply of quality Grade A office space, often demanded by the IT /ITeS segment has shrunk leading to a rise in the rentals of the prime areas. The rentals have gone up in these areas from Rs 28 – Rs 30 per sq ft in 2010 to Rs 40 now. In some locations it is as high as Rs 60 per sq ft.
The current deceleration will benefit the city in the future. As rates in prime areas like Hinjewadi is sky-rocketing, demands for new office space will arise in other areas.