pune office property market overview april 2015
DESCRIPTION
Pune | Office April 2015:IT / ITeS driving the city office real estateTRANSCRIPT
1 Research & Forecast Report | April 2015 | Colliers International
IT / ITeS driving the city office real estateRenewals and expansions by IT / ITeS companies continued to drive the Pune office market in 1Q 2015. However, the city’s office absorption was recorded at approximately 0.89 million sq ft, which is 40% lower than the previous quarter’s absorption. Nagar Road and Airport Road / Pune Station continued to remain as the most preferred locations by major occupants, each with about 24% of the total absorption, followed by Hinjewadi and Hadapsar / Fursungi, each with about 16%.
Occupiers from the IT / ITeS sector were the primary contributors to this demand, taking up more than 90% of the total absorption. This was followed by other sectors like Logistics, Pharma and Manufacturing, accounting for over 7% of the total absorption. A number of large-floor plate deals were concluded this quarter, like the 0.13 million sq ft lease by Vodafone India in Business @ Mantri located on Nagar Road. In addition, Amdocs took 0.08 million sq ft in Magarpatta Cybercity Tower 3, and more than 0.05 million sq ft each was taken by Rockwell Automation and Access Health Services in Embassy - Mississippi located at Hinjewadi.
About 4 million sq ft was available for lease in Pune market, of which 24% was located on the Airport Road / Pune Station, 18% Nagar Road and 16% in Hinjewadi. The city witnessed limited new supply, and only about 0.64 million sq ft of Grade A supply was added to the city’s Grade A inventory. Projects that contributed to this new supply were Marvel Alaina and Marvel Edge, both by Marvel Group, at Koregaon Park and Viman Nagar, respectively.
Despite low absorption, developers like Vascon launched
City Office Barometer
Research & Forecast Report
Pune | OfficeApril 2015
Rental Values
*Indicative Grade A rents in INR per SF per month
MICRO MARKETS RENTALVALUE*
% CHANGEQoQ YoY
Baner 45 - 55 0% 0%
Bund Garden 50 - 65 0% 0%
Airport road/pune station 45 - 75 0% 7%
Aundh 45 - 60 0% 0%
Senapati Bapat Road 55 - 85 0% 0%
Bavdhan 35 - 45 0% 0%
Kalyani Nagar 45 - 60 0% 0%
Nagar Road 40 - 60 0% 0%
Hinjewadi 34 - 45 3% 3%
Hadapsar/Fursungi 38 - 65 0% 7%
Kharadi 34 - 65 2% 2%
INDICATORS 1Q 2015 2Q 2015 F
Vacancy
Absorption
Construction
Rental Value
Capital Value
2 Research & Forecast Report | April 2015 | Colliers International
Platinum Square (0.04 million sq ft) at Viman Nagar, Nyati launched Nyati Emporius (0.03 million sq ft) at Baner and MSR Group launched a 0.07 million sq ft project at Sangamwadi. Th ese projects are currently under construction and are expected to be completed in 2016.
Th e rents for prime offi ce property remained stable across all major micro markets, except in Hinjewadi and Kharadi, where rents rose by 2–3% QoQ. Capital values remained on the same level compared to that of the previous quarter across Pune.
Colliers View
Th e offi ce market of Pune will continue to remain upbeat due to strong fundamentals. IT/ITeS will remain as the key occupier in the coming quarters of 2015. Vacancy is expected to decline due to lesser amount of new supply and increase in absorption. Rents are expected to inch up in medium term.
Top 5 Transactions of the Quarter
Key Under Construction Projects
CLIENT BUILDING NAME AREA (SF) LOCATION LEASE / SALE
Vodafone India Business @ Mantri 133,379 Nagar Road Lease
Amdocs Magarpatta Cybercity Tower-3 88,000 Hadapsar Lease
Rockwell Automation Embassy - Mississippi 51,516 Hinjewadi Lease
Access Health Services Embassy - Mississippi 51,116 Hinjewadi Lease
HCL Business Bay 46,000 Yerwada Lease
BUILDING NAME DEVELOPER AREA (SF) LOCATION POSSESSION
SP Infocity Building 5 Shapoorji Pallonji Group 800,000 Phursungi 2015
Commerzone Building 8 K Raheja Corp 420,000 Yerwada 2015
Acendas Phase II Acendas 615,000 Hinjewadi 2015
Notes:
1. Offi ce Market: Th e prime offi ce sub-markets of Pune include CBD (Deccan Gymkhana, Bund Garden Road, Senapati Bapat Road & Camp), Off CBD (Aundh, Airport Road and
Kalyani Nagar) and the eastern corridor, along with Nagar Road and Kharadi, which have emerged as a preferred location for fi nancial and IT/ITES companies.
2. Rents/Capital Value: Market average of indicative asking price for Grade A offi ce space.
3. Available Supply: Total Grade A offi ce space being marketed for sale or lease in surveyed quarter.
4. City Barometer: Represents increase, decrease or stable scenario; as compared to previous quarter.
5. All the fi gures in the report is based on market information as on 25th March 2015.
Quarter Wise Absorption
Average Rental And Capital Value Trend
6,000
7,000
8,000
5,000
4,000
3,000
2,000
1,000
0
80
70
60
50
20
10
40
30
0
0.30
0.60
0.90
1.20
1.50
1.80
0.00
1Q 2
013
2Q 2
013
3Q 2
013
4Q 2
013
1Q 2
014
2Q 2
014
4Q 2
014
1Q 2
015
3Q 2
014
Mill
ion
Sq.ft
Rent
al V
alue
s IN
R Pe
r Sq
Ft P
er M
onth
Capi
tal V
alue
s IN
R Pe
r Sq
.ft.
1Q 2
008
1Q 2
009
1Q 2
010
1Q 2
011
1Q 2
012
1Q 2
013
1Q 2
014
1Q 2
015
1Q 2
016F
1Q 2
017F
Forecast
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