Your Weekly Dose of News from the Commercial Real Estate Industry
Mumbai Leads India's Office Rental Market, Closely Followed by Bengaluru
According to the 'India Real Estate Q3 2023' report from Knight Frank India , Mumbai is the most expensive city in India for office spaces, with rental rates of Rs 113/sq ft/month. Bengaluru comes in second with rentals at Rs 85/sq ft/month.
In Q3 2023, office transactions across India's prime eight markets increased by 17% YoY, reaching 16.1 MSF (million square feet). This growth not only reflects the confidence of global businesses in the Indian market but also points to India's economic resilience amidst global uncertainties.
Global Capability Centres (GCC) were responsible for 44% of the office transactions as global corporations expanded their India-based operations. India-facing businesses accounted for 37% of office dealings, equivalent to a six mn sq ft boost.
Mumbai stood out with 3.2 mn sq ft in transactions, making it the most bustling office market during the period. Rental values also showed stability or an increase across all major markets for the sixth quarter. Kolkata saw the most impressive growth, spiking rental values by 10%. Bengaluru, Mumbai, and the NCR followed suit, recording growth rates of 5%, 3%, and 2% YoY respectively.
New office completions stood at 11.5 mn sq ft, with Hyderabad contributing 46% to the new office space tally with 5.3 mn sq ft, followed by Bengaluru.
Shishir Baijal , the driving force behind Knight Frank India, emphasized the Indian economy's strength in luring global corporate interest. The robust demand in the Indian office space sector, especially the rise of GCCs, showcases India's promising business environment.
India's coworking and flexible spaces are on a promising trajectory with a 17% YoY transaction surge. Cities like Mumbai and Pune registered their peak quarterly transaction volumes since 2018.
In summary, Mumbai and Bengaluru are in high demand for coworking spaces in India, with the country's evolving workspace landscape promising growth potential.
iSprout Secures 40 Cr Funding to Expand Across India
iSprout Coworking Spaces , a major coworking space brand in India, has raised INR 40 crore from Vivriti Asset Management . This top-performing credit asset manager invests heavily in India's mid-market enterprises.
Since iSprout's founding in 2016 by Sundari Patibandla , Sreenivas Tirdhala , Sesha Prasad Kondapalli , and Vijay Oddiraju, the company has aimed to meet the growing demand for managed office spaces for startups and well-established businesses. Sundari Patibandla, CEO and co-founder, said that Vivriti Asset Management was drawn to iSprout's commitment to providing premium office solutions and outstanding services. The funding will enable iSprout to pursue measured expansion plans throughout India.
The funding is earmarked for improving the company's assets. A significant portion will be used to bolster iSprout's presence in its core markets of Hyderabad and Bengaluru. Additionally, they aim to invest in proprietary technologies to streamline critical operations. Sreenivas Tirdhala, CMO and co-founder, highlighted that iSprout, having grown by 200% in recent quarters, is strategically placed to capture a substantial portion of India's premium managed space market growth.
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Mohamed Irfan from Vivriti Asset Management emphasised the rise of flexible spaces in India, particularly post-pandemic. Providers like iSprout, who provide top-tier experiences while managing their finances wisely, will be the industry front-runners.
iSprout's recent accomplishments include unveiling office spaces in Divyashree Trinity and My Home Twitza, Hyderabad, which have already reached full occupancy. With plans to launch their thirteenth centre, Aurobindo Orbit, by November 2023, iSprout is on track to surpass 1 MSF and achieve a turnover of more than 120 Cr by the fiscal year 2023-2024. Their ambitious roadmap extends beyond Hyderabad and Bengaluru, eyeing cities like Chennai, Pune, Delhi NCR, and Kolkata.
Skootr Leases 21,000 sq ft to Pinnacle in Hyderabad
Skootr Offices , a top coworking firm in India's flex industry, has leased 21,000 sq ft of office space to Pinnacle Group, Inc. , a US-based leader in industrial reliability solutions. The collaboration takes place in Skootr's new centre in Hyderabad, with assistance from Colliers India.
With a dominant presence in the US, Pinnacle is entering India's burgeoning coworking space, marking its footprint. This move highlights Hyderabad's growing prominence in the office industry. Skootr has recently acquired around 3 lakh sq ft to introduce its new centre, 'My Home Twitza', in the city's thriving secondary business district. This spacious centre, set to open this month, boasts a seating capacity of approximately 3,500.
Pinnacle occupy a 21,000 sq ft space of this expansive area, equivalent to around 350 desks. This leasing move testifies to the changing dynamics of the work environment. The pandemic has significantly shifted workforce behaviours, emphasising the value of agility. With many experts opining that a complete return to pre-pandemic working norms is unlikely, the allure of flexible spaces in India is more pronounced than ever.
Puneet Chandra , Co-Founder of Skootr, highlighted the evolving scenario. Amidst the prevalent uncertainties, he remarked that flexible spaces have become crucial for businesses revisiting their real estate strategies. In tandem with this trend, Skootr's portfolio in Hyderabad has swelled to an impressive 5 lakh sq ft.
The city's growth trajectory has been noteworthy, becoming a favoured destination across various sectors, from IT and manufacturing to BFSI. This upward trend has significantly escalated the region's commercial and industrial real estate demand, further solidifying Hyderabad's position as a hub for flex workspaces.
Most In-Demand Locations This Week-
Metro City: Delhi
Micromarket: Nehru Place
Non-Metro City: Patna
Micromarket: Patliputra Colony
Assistant Facility Manager at SILA
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