Bangalore Stands 2nd Best for Commercial Investment

Published on May 22, 2013, 03:20 AM IST
Bangalore Commercial Investment
Mumbai is the best city in India for commercial real estate investment, with returns of 12-19 per cent likely in the next five years, according to a study by Knight Frank.

Bangalore and Delhi-National Capital Region (NCR) come second and third on the list, with returns of 12-12 per cent and 8-11 per cent, respectively, according to the report, Top Business Districts in India to
invest In.

In Mumbai, central and suburban
business district (SBD)-west have grabbed the top two spots, according to Knight Frank.

Office space in Mumbai had more than doubled between 2008 and 2012 from 47.4 million sq ft to 95.1 million sq ft. But demand remained bleak, the report said. Vacancy rose sharply from 4.3 per cent in 2008 to 23.2 per cent in 2012, and office rentals declined 10-40 per cent during this period.

Bangalore was one of the key office markets in southern India. A number of industries such as manufacturing, automobile and biotechnology have a stake in the economy of the city. But the IT/ITeS sector was the primary driver for office space demand, said the report. Of late, online retailing companies such as Amazon, eBay, Flipkart and Snapdeal have turned to Bangalore for their office space requirements.

IT/ ITeS accounted for 57 per cent of the office space in the southern city, followed by BFSI and manufacturing sectors at 18 per cent and 15 per cent, respectively. The office space stock in Bengaluru was 99.3 million sq ft, of which 86.3 million sq ft was occupied. A steadier demand during 2013-17 would ensure that the vacancy level reached 12 per cent by 2017 and rentals continued to be stable without much drastic variations, added the Knight Frank report.