Pune’s Commercial Real Estate Market: An Optimistic Outlook-2015

Pune's commercial real estate market is progressively pulling in the consideration of significant office space occupiers. The city is gradually becoming a second alternative to Mumbai, as a result of its accessible quality space alternatives, relatively reasonable rental rates, and additionally its closeness and great integration with India's budgetary capital, Mumbai.

Property prices in Pune realty market’s major micro markets saw a decent surge over the year 2014. Despite the slowdown witnessed across other major cities in India, Pune real estate market stood sturdy and resilient due to high demand from the IT/ITeS sectors.

Here are some of the factors that supports the fact that the year 2015 will prove to be a positive year for the Pune real estate market; especially the office space market

1.      Addition of More Office Space

Almost 1.4 million sq ft of evaluated office space was added to Pune's aggregate business office stock in the quarter part of 2014. The off-CBD micro-market area of the city saw noteworthy undertaking fulfillments at Bavdhan, Gultekdi and Baner amid the second quarter of the year; while the CBD micro-markets of Boat Club Road and Koregaon Park had seen critical supply expansion in Q1 2014.

2.      Opportunity for IT & Other Industries

As far as policies pertaining to the real estate of the city are concerned, in the meantime, the Pune Municipal Corporation (PMC) has put forth a proposal to give concessions to new IT firms setting up work places in the city. This will be a boost to the given positive condition. Such firms will be charged property charge at the same rate as private properties, bringing down office inhabitance costs altogether. This proposal will also project Pune as a favorite end of the line for IT firms in the nation.

3.      Flourishing Industries Opting the City

Pune's traditional industrial center point has been going solid as well. Apart from the IT/ITes segment, the Finance domain as well as the insurance sector has likewise been focusing on the city lately. Multinational financial organizations have been progressively looking out for office space in Pune for their back-office necessities and other non-corner divisions. Moreover, the nearness of Pune to the economic zone of India, which is Mumbai, is also going to make sure that the office space market in Pune gets more and more investors and occupiers.

4.      Starry Residential Spaces

Success of a particular office space market depends on the nearby residential area, to a good extent. If the nearby residential space is popular and flocked then there are chances that the closed commercial area will also flourish. Realtors know the fact that people prefer to stay near their workplace; hence the commercial market or office market near well-known residential townships have a brighter chance to stay ahead of others. Some of the well-known residential spaces and price trends are illustrated below:

The rates of residential space affects the office spaces as high rentals repel the occupiers and coax them to go for some other areas.

5.      Grade A Office Space

The need of Grade A office space that is surging with every passing quarter has guaranteed the increased pace of exchanges in the city. The positive numbers is a consequence of the merging or extension activities of key corporate space occupiers. Amid the second quarter of June 2014, Pune's office business sector saw more than a 150 per cent surge in absorption rates on a quarter-on-quarter basis. The numbers are going to increase in the coming quarters of 2015 as well.

The Verdict

The real estate market and especially the office market of Pune have grown substantially in passed by years. The growth is likely to be seen in the upcoming quarters of 2015 as well. Moreover, the successful residential townships and nearness to Mumbai are also some of the factors that have managed to take the success graph of the office market to a next level.

Title Credits: Sapna Singh