Expansion Of IT Companies Leading To Growth In Commercial Real Estate

The total relocations across top eight cities in the first half of 2013 was at 5.46 million square feet which was 2.5 times higher compared to the same period last year and is one-third of the total leasing activity, said Cushman & Wakefield, a global real estate consultants, in its latest report. “The markets have seen a large number of corporate relocating and consolidating their operations within a city to locations with quality construction with space scalability options at rentals lower by as much as 15-30 per cent. IT/ITeS saw major relocations across the top eight cities to peripheral locations,” Ritesh Sachdev, Executive Director, Tenant Strategies & Solutions, Cushman & Wakefield.

During the first half of 2013, Bangalore recorded the highest proportion of relocations with a substantial increase of more than three times when compared to the same period last year. Companies relocated from locations such as MG Road, Millers Road, Vittal Mallya Road and Residency Road to peripheral regions such as the Outer Ring Road.  Huge increase in commercial real estate has also been recorded in cities such as Delhi, Mumbai, Hyderabad, Chennai, Pune and Kolkata, main reason being lower rentals and more available office space in outskirts of cities.  

Commercial real estate absorption is expected to pick up at a steady pace with 28 million sq ft to be absorbed by 2015, Cushman & Wakefield has said.