Investment Potential Of Rs 1,310 Cr In Office Space Up-gradation In Bengaluru
New Delhi: There is investment potential of Rs 1,310 crore in office space up-gradation in Bengaluru with a payback of about 3-5 years.
Limited construction opportunity is causing low supply pipeline in the next few years together with occupier preference to lease office spaces in the CBD of Bengaluru provide a glimpse of how important it is for office space owners to upgrade their old stock.
In the IT capital of the country, the stock of Grade A office buildings constructed 10 years ago stands at 34.5 million square feet. It is about 26 percent of the city’s overall office stock, according to a report by JLL.
Upgraded office spaces lead to premium office spaces for occupiers and result in higher rentals and even higher occupancy rates because of greater connectivity and thus higher absorption and brand building or creating “an address.”
The CBD and SBD in Bengaluru have a limited supply pipeline of Grade A office spaces. With limited supply expected in such core locations, the demand is gradually shifting towards Whitefield. It may also slowly shift towards newer places in North and West Bengaluru.
Hence, the SBD East and South East as well as the Whitefield micro-markets are slowly becoming landlord favourable areas, while leasing activity is slowing down in the CBD and SBD.
“Bengaluru presents an up-gradation potential of 35 million square feet. The total investment expected is around Rs 1,310 crore. For owners, upgradation based on user preferences and technology infusion will be a critical element in a building’s lifecycle management in the near future. The question is no longer ‘if’ but ‘how soon’ can we do this,” said Harish MV, Managing Director (Projects and Development Services), JLL.