E-Commerce Firms Drive Commercial Realty
Published on Sep 3, 2014 by Abilash
The India Real Estate Outlook - Bengaluru, a survey report for Jan-June 2014 by leading global property consultants Knight Frank released recently, says that despite the complaints about Bangalore's potholed roads, bad pavements and traffic jams, the city is the most favoured office space destination in India. The city has nearly 109.5 million sqft of functional office space.
Bangalore's office market has evolved primarily due to the growth of the IT-ITes sector. Though the industry continues to grow, the pace has slowed down due to the emergence of newer sectors and the global economic slowdown. During the first half of 2014, the market clocked a total 7.6 million sq ft of office space.
Satish B N, executive director, South-India, Knight Frank India Private Limited says that IT-ITes industries have been the driving force behind the real estate market all these years, but of late, the e-commerce sector has been playing a vital role. While ORR continues to drive the realty market, North Bangalore, with affordable rents and good infrastructure which has reduced the commuting time, has stretched the office space from Hebbal to Yelahanka.
The survey has a dull pointer - the IT-ITes firms had taken away 64% of the office space share during Jan-June 2013 and 71% between June-December. But over the last six months, the consumption dipped to 54%. Bangalore saw the advent of several e-commerce firms termed as "Other Services" category which have had 24% of the market share in the last six months compared to 13% last year. Besides this, consulting, media and advertising also added to the rise in the Other Services category.
According to Syed Beary, CMD of Beary's Group, the overall realty market has seen a drastic change with e-commerce, R and D and lab spaces setting up shops in Bangalore and having major expansion plans in the pipeline. ``Flipkart is taking about 1.5 million sqft of space in the next three-four years and has floated tenders. All these years, Bangalore was known for IT-ITes firms and now the city is also an R and D hub. Consolidation and expansion of R and D and acquisition for lab space is pushing the market forward,'' analyses Beary.
In March 2014, Flipkart took 37,000 sqft of space in Salarpuria Oasis on Koramangala Inner Ring Road for expansion and 16,320 sqft in September 2013 at Ashford Park View, Koramangala. Myntra moved into 60,000 sqft space in AKR Tech Park off Hosur road. Amazon had zeroed in on 40,000 sqft in World Trade Centre, Rajajinagar. As a new entrant in 2012, e-Bay had occupied 47,000 sqft in Whitefield's Brigade Tech Park and 1.25 lakh sqft in Pritech Park, Marathahalli Outer Ring Road.
The study has also pointed out that infrastructure projects have been largely responsible for the growth of office market, of which the ongoing Namma Metro is the most ambitious. ``Developers are expected to launch office projects on the newly opened Sampige Road-Peenya line stretch. The Outer Ring Road is another project that has improved the connectivity. Signal-free corridors with flyovers and underpasses have contributed to the rise in office, residential and mixed-use developments,'' the report said.
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