Sunday, February 20, 2005

City Is Number 1 In Total Commercial Space Taken Up In 2004

Climbing higher
IT is still with booming Bangalore
City Is Number 1 In Total Commercial Space Taken Up In 2004
The Times of India

Bangalore: Did someone say poor infrastructure and the Dharam Singh regime have dampened investor enthusiasm for Bangalore? Well, some data we have shows nothing of the kind.

The city was No. 1 in total commercial (grade A) space taken up in 2004, accounting for nearly a third of the pan-India figure. This is up from about 24 per cent in 2003. And the forecast is that the trend in 2004 will continue into the current year, driven by the massive demand for space from the BPO sector.

According to estimates by property consultancy Jones Lang LaSalle India (JLL), the total commercial grade-A (new and high quality) space taken up in Bangalore in 2004 was 7.3 million sq ft, 32 per cent of the all-India figure of 23 million sq ft. In 2003, Bangalore accounted for 3.7 msqft out of the pan-India figure of 15.5 msqft.

Property consultancy Cushman & Wakefield India (C&W) has similar estimates. As per the consultancy, Bangalore absorbed 7.6 msqft of commercial grade-A space in 2004, way ahead of Delhi-Gurgaon-Noida at 2.9 msqft and Mumbai at 2.5 msqft.

For the current year, JLL forecasts that Bangalore’s demand for office space will go up to 8.5 msqft and the pan-India demand to 26 msqft. C&W estimates that the Bangalore figure would be about 8 msqft.

“Despite competition from other cities, Bangalore remains the No. 1 destination for IT and IT-enabled services, which account for 80-90 per cent of the demand for commercial space in India. Bangalore has ability to attract migrant talent because of the perception about the city’s quality of living,” says Chanakya Chakravarti, joint managing director of C&W.

He notes that problems of infrastructure in Bangalore have not affected its relative position because other cities in India face similar issues.

Manisha Grover, associate director in JLL, says the high absorption last year is encouraging developers in Bangalore to go all out to capture the opportunity this year by putting out speculative supply in the market, in volumes that are much larger than in 2004. “It reflects their confidence in the growth trend for IT and ITES over the next 18-24 months,” she says.

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