High growth in corporate real estate sector: Study

The corporate real estate sector has registered a tremendous growth in 2015 despite claims that Bengaluru’s infrastructure problems are driving out  IT and ITES companies, a recent study has revealed.

According to the study, 56 per cent of real estate deals struck last year were to create office spaces for IT and ITES companies, way ahead of property purchases by financial services firms, which stood at 12 per cent and e-commerce firms at 6 per cent. The study states that 33 per cent of corporate real estate spaces in the country are situated in the City.

There has also been a five to 17 per cent growth in the corporate rental sector.According to the study, 70 per cent of large scale deals of properties measuring around 100,000 sqft and small scale deals of properties measuring around 50,000 sqft were in Bengaluru, Gurgaon and Pune.

Transactions grew by 18 per cent in 2015, in which Bengaluru’s share was 32 per cent, while Delhi NCR contributed 23 per cent. New office space supply rose by 40 per cent year on year. Of this, 65 per cent was commercial (non-IT) office space and 22 per cent SEZ space. People in the IT sector say since companies do not want to ignore Bengaluru, a big engineers’ market among major metros, they tend to rent out or lease out property.

Growth in corporate real estate is on the rise in Eastern Bengaluru, South and South Eastern Bengaluru and Northern Bengaluru. “These three hubs are where the IT sector is growing and corporates are setting up economic parks. The rapidly growing hubs is the reason why corporate real estate is thriving in these areas,” says a project manager from Infosys.

The study states that a few bottlenecks in the City have been removed. For example, a ten km elevated toll way has been constructed on Hosur Road from Silk Board Junction to Electronic City, which enables one to reach Electronic City in only ten minutes from Silk Board.

Similarly, a metro line is coming up till Bommansandra in the next three years. As far as Whitefield is concerned, a metro line is coming up right up to Whitefield from Baiyappanahalli. A few infrastructure projects are on to connect central Bengaluru with its suburbs.

The next five years could decide where Bengaluru stands on the IT/ITES front, when these infrastructure projects are ready.