The office space (commercial real-estate) market is getting stable from last five months. Earlier, the market situation was grim due to political agitation.
Overtime, businesses are gaining confidence in the City. Begumpet, Panjagutta, Banjara Hills, Kondapur, Madhapur are the key locations which have got huge demand, said Chayan Mukherjee, sales and recovery head, Prajay Engineers.
Around 60 per cent of the companies go for leasing the property than owning it. The domestic companies go for renting a property for first few months, once they see good returns and gain confidence in the environment, they look for settling by buying the property. The demand for rental properties is higher, compared to last year and there are also good returns on rentals, he said.
Many major companies are looking for renting office space with a floor plate size of 10,000-15,000 sft in areas around Somajiguda, Begumpet, Banjara Hills, Jubilee Hills, which come under central business district. However, the supply is not in proportion to demand. Many of the companies have also started buying the properties as the commercial property prices became low last year. However, they are limiting themselves to purchase 50 per cent less space than they actually require to bring down costs and are also waiting to get clarity on political uncertainty. The facilities like car parking, GHMC approvals and location are key parameters for purchasing a commercial property, said M Rama Krishna, sales head, Vamsiram Builders.
The market is driven by new companies coming in to the City that not only include IT but also include other sectors like banking, finance, petroleum products. The property prices have grown up by 10-15 per cent compared to last year where as rentals grown by around 15-20 per cent, he said.
The sub-urban market like Miyapur, Kompally, Manikonda are yet to take off for commercial office space absorption. However, certain sub-urban areas around Gachibowli, HITEC City are most sought after by IT companies, he said.
Even though, the office space absorption has increased and businesses buying properties, the clarity on political agitation, which may take another two years, will only make it to regain its full potential, he added.