The demand for commercial spaces and the occupier’s interest in them continues unabated as can be seen from the rise in precommitment levels in key office markets across India. The pre-leasing activity is on the rise not only for commercial projects to be completed this year, but also for those scheduled to be completed over the next two years.
Buyers book residential properties long before they are actually completed, but it is not so with commercial properties. Commercial projects are usually bought or leased closer to the project's completion date and stronger precommitments from occupiers is a sign of business uptrend.
And the city that is witnessing the highest precommitment levels among the key Indian office markets is Pune. At the end of second quarter, Pune's pre-commitment activity stood at 48%, which is almost half of the total supply expected during 2017.
Bengaluru has already seen 39% of its total supply coming through 2017 pre-committed, while Mumbai and Delhi-NCR have also recorded pre-commitment levels of 33% and 22%, respectively, as per a JLL India study.
A similar trend has been observed for the next two years as well. In Mumbai and DelhiNCR, pre-commitment activity is being seen in projects getting completed in 2019 too. Mumbai has a pre-commitment level of about 17% for projects expected in 2019.
“In Pune, pre-commitment activity is being mainly led by IT-ITeS and BFSI occupiers while in Delhi-NCR, it is mainly driven by IT-ITeS occupiers.In Mumbai, a wider spectrum of occupiers from BFSI to IT, telecom and healthcare are driving this trend. Hyderabad too is seeing similar activity, thanks to rising interest from occupiers from information technology, consulting, telecom and healthcare sectors,“ said Ramesh Nair, CEO & country head, JLL India.
With business outlook improving and an ongoing uptrend in rentals for office properties, more and more occupiers are considering locking their future space requirement in right locations and projects now.
Taking into consideration the supply coming through 2018, 29% of it has already gotten pre-committed in Pune. The figure for Bengaluru stands at 26% followed by Mumbai at 15% and Hyderabad 7%. Most occupiers across India have a preference for pre-commitment in projects scheduled to be completed within a two year timeline.