In fact, industry analysts say CBD continues to be the most popular destination among small corporates, insurance firms and banks seeking space to house their back-end services teams. The proof lies in Bengaluru-based major Salarpuria Sattva Group’s decision to build 5 lakh square feet (sqft) of office space on Banjara Hills Road No 1, adjacent to the Jalagam Vengal Rao Park. “The location and connectivity of CBD area are its primary strengths, which spurs increased demand. The only reason rentals have been stagnant here is because of insufficient supply of ‘A’ grade office space,” said Piyush Agarwal, DGM (Business Development) of the group, which promises to plug this deficiency. Marketing of the project – Salarpuria Sattva Signature – officials say, will open in a few months from now.
In its quarterly report earlier this month, Colliers International, a global commercial real estate services firm, indicated a 5% year-on-year drop in office rents in CBD and a staggering 21% jump in the SBD (secondary business district) or the western stretch area. “Flexible growth opportunity, better infrastructure provides better talent attraction and retention opportunities, and comparable rentals,” the Colliers team list as reasons pushing offices out of the CBD and towards the IT belt.
“Some offices which have shifted include GE and Haier.
The trend will continue as we do not foresee any possibilities of CBD addressing these above-mentioned opportunities in near future,” the firm’s research includes.
City realtor’s closely tracking this market differ. While they admit the core area isn’t conducive to house large-sized companies, particularly IT firms, they maintain that lessees looking at occupying spaces in the 3,000 sqft to 8,000 sqft range still prefer CBD. In fact, some sources claim that a leading private bank has, of late, been scouting for as much as one lakh sqft in Ameerpet to set up its back office.
“It is like a ripple effect. Once IT does better other office spaces are bound to do better too. Also, the CBD has a strong social infrastructure that pulls crowds,” said Ashwin Rao, director, Manbhum Construction while suggesting the belt contrary to popular perception has seen a 10 per cent growth in rentals. While that might not be true of every property just yet, their prices will peak once the Metro chugs in, say some others. “The project will enhance the connectivity of the area and thus spike the rates.