More Malls in Pune to Capitalize on Strong Office Demand
As occupiers in Pune face a severe shortage of quality office assets across most micro-markets, it has led to a scenario where there are hardly any options left for them to occupy space matching their flexibility and preference requirements. An abysmal vacancy rate of ~6% in Pune’s grade-A commercial real estate market is a crisis across most micro-markets, and the bigger occupiers are most affected.
Occupiers not looking for bigger floor plates or the latest amenities and grade-A specifications, are looking towards considering grade-B properties as well. The grade-B office market vacancy stands at 13-15%. Other tenants are either relocating or consolidating leading to a churn in the market in the last few quarters. It is also leading to many occupiers pre-committing space in under-construction projects.
In such a supply-demand scenario, rents are expected to go up. Therefore, developers with average or poorly-performing malls and even hotel owners have started converted such assets into office spaces. An intact occupier demand coupled with the existing supply crunch resulting in rising rentals and REITs expected to launch soon, commercial developments have become an attractive proposition for many developers.
Resultantly, refurbishment of retail developments has recently started emerging as another source of office space supply. For example, Kakde Centerport mall got refurbished into office space. Some other developments are either coming up as mixed-use assets with office space being an integral part of their product mix or refurbishing into such an asset, for example, Amanora mall that is a combination of both office and retail space. Some more such examples are:
What else is happening?
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