Pune office absorption gains momentum; July-Oct leasing tops 1 million sq ft – ET RealEstate

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MUMBAI: Commercial real estate activity in Pune, one of the key information technology and IT-enabled service hubs in the country, has started picking up after witnessing sluggish activity during the lockdown and the ongoing Covid-19 disruption.

The market has recorded absorption of over 1 million sq ft during July to October compared to a 1 million sq ft absorption in the first half of the year until June, showed data from JLL India.

The city witnessed large corporate occupiers renewing their existing office leases as a part of their long term corporate real estate strategies during July to October.

The leasing has been primarily led by financial services and insurance, fintech, Indian and global technology services firms, and co-working space operators.

“Most sectors continue to expand their footprint in the city owing to the diverse and quality talent base, large world class campuses offering competitive rents and the city’s vibrant and cosmopolitan lifestyle. Due to these factors, Pune remains a favorite among occupiers, developers and investors. The deal pipeline for 2021 looks strong,” said Sanjay Bajaj, Managing Director – Pune, JLL.

Average vacancy in Pune during the last three quarters remained range bound and stands at 4.7%–one of the lowest in the country, at the end of third quarter.

Around 7 million sq ft of new supply is scheduled for completion by the end of 2021.

“The initial part of the financial year saw occupiers focusing on business continuity and seamless delivery of services for their global clients, following a cautious approach to committing to larger areas, although, there have been small spurts of demand from multinationals seeking spaces for their immediate needs,” said Vinod Rohira, CEO, Mindspace Business Parks REIT.

According to him, the reduced supply of grade A offices, sub dollar rentals, skilled human capital, increased preference for high quality and safe office spaces, has augured well for key developers like Mindspace, in several markets, including Pune.

Among key transactions in October, global alternative legal services provider DWF Mindcrest leased over 280,000 sq ft of office space at Mindspace Business Parks REIT in Pune‘s Kharadi locality, while flexible office space operator Simpliwork Offices also inked a long-term lease for 230,000 sq ft office space at Sky One Corporate Park in Pune.

The rentals are plateauing in the Pune market offering value driven propositions and opportunities to occupiers.

Moreover, the landlords across the city are more flexible now and open to innovative deal structuring, including incurring capital expenditure towards fit outs on behalf of occupiers. These factors are helping occupiers achieve a more cost-effective cash outflow.

Pune has been attracting large institutional funds and developers as nearly 47% of the city’s grade A office stock is directly or indirectly under the ambit of institutional funds or developers. And an additional 25 million sq. ft. is projected to be added in the next five years.

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Pune residential sales up 58% quarter-on-quarter in Q3, launches rise 55% – ET RealEstate

MUMBAI: Property market of Pune has witnessed 58% sequential rise in housing sales to 1,344 apartments in the third quarter led by the state government’s move to reduce stamp duty on property transactions. Sales momentum was also supported by low home loan rates, attractive schemes by builders, and competitive prices.

Residential launches in the city saw a 55% sequential jump to 1,756 new units during the quarter with locations like Kharadi, Hinjewadi, Wakad and Hadapsar accounting for more than 50% of the launches, showed data from property consultancy JLL India.

This strong growth was on a low base of the second quarter that was significantly impacted owing to the severe lockdown restriction in the wake of ongoing pandemic.

Homebuyers preferred projects that are closer to prominent office locations and are being developed by established builders with an execution track record. There are also a higher number of enquiries for completed and nearing completion projects as compared to those which have recently launched.

“Developers continued to align new supply with demand and the majority of these launches were in affordable and mid segments. Further the city has also witnessed healthy traction in the luxury segments which was not visible earlier,” said Sanjay Bajaj, Managing Director, Pune, JLL India.

In the subsequent quarters, he believes, the translation of demand into sales will primarily hinge on enhanced consumer confidence, which in turn depends upon the continued implementation of progressive government policies amidst the gradual revival of the Indian economy at large.

There is growing acceptance of digital platforms amongst homebuyers to complete their home purchase process from raising an inquiry to making the payment through the developer’s online window, he added.

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