Bangalore office space hits 10 mn mark

Bangalore's commercial office space absorption hit the 10- million square feet mark by the end of the third-quarter of this year largely through investment by IT players, financial services companies and banks seeking to access the city's talent pool.

Three million square feet of space have been committed (possession taken) in finished projects and over seven million square feet of space have been booked in projects which are in their various stages of construction, said the Q3 property snapshot put out by international property consultants, CB Richard Ellis.

About six million square feet of commercial space under constructions across all micro markets is expected to be ready by the end of the year (2006) of which over 2.5 million square feet is coming up in the Whitefield area.

However, keeping in mind the supply situation in Whitefield, completion of a portion of this 2.5 million square feet is expected to be pushed into the first quarter of 2007, says the CB Richard Ellis report.

Despite such a huge supply coming into the market, rental values have seen an increase in the CBD and the non-CBD areas, mostly owing to a lack of quality supply.

Rentals have remained stable in the other micromarkets, except in Whitefield where due to an oversupply, rentals have seen a marginal decrease and clients are able to get more flexible lease terms. Capital values have witnessed a marginal increase across all micromarkets.

According to Ram Chandnani, head-south India operations, CB Richard Eills, "A simple analysis of the transactions completed so far reveals that this is the era of consolidation."

He goes on to say: "All big players in the Bangalore real estate space have committed to large spaces for consolidating and expanding their operations."