20 December 2016

Top 10 office micro-markets which witnessed highest rental growth in 2016 

In 2016, the technology-driven office markets such as Bengaluru, Hyderabad and Pune witnessed a significant rental increase in the preferred micro markets. Take a look at the top 10 office micro-markets in India which witnessed the highest rental growth in 2016:

Rental appreciation (yoy)

City- Micro market

 
21.0%

 
Hyderabad - SBD

Rents in Secondary Business District (SBD) grew by 21% YOY as a significant proportion of occupier demand is skewed towards this micro market. Due to availability of premium office spaces, pedigreed developers offer superior amenities at reasonable rentals compared to other cities. SBD Hyderabad include locations in West Hyderabad such as Madhapur, HITEC City, Gachibowli, Nanakramguda, and the Financial District.

 
18.7%

 
Pune - Hadapsar / Fursungi

Hadapsar/Fursungi micro market is one of the fastest growing suburbs of Pune with two reputed Special Economic Zones Magarpatta city and Fursungi IT park. There are several affordable residential catchments for the working population in this micro market. Hence, there is a considerable occupier preference. However, scarcity of Grade A supply resulted in a 18.7% uptick in this micro market on a YOY basis.

 
18.0%

 
Pune - Kharadi

Kharadi has emerged as a prominent IT hub of Pune due to growing interest from several notable technology companies and presence of the EON IT Park, one of the largest IT parks in Pune. Rents increased by 18% on a YOY basis due to a severe supply crunch and keen interest from occupiers.

 
16.4%

 
Bengaluru - Outer Ring Road (ORR)

Being an established IT/ITeS hub, Marathahalli-Sarjapur belt sustained high demand momentum garnering the highest share in gross absorption in 2016 causing a 16.4% annual rental escalation. Proximity to Marathahalli coupled with some large scale IT Park developments becoming ready for possession has led to a steady rise in transaction volume in the K.R. Puram-Hebbal belt of RR. Demand spillover from the neighbouring ORR led rents to appreciate by 11% on an annual basis in this belt.

 
12.9%

 
Pune - Senapati Bapat Marg

One of the upcoming office leasing destinations, sustained demand, and lack of quality Grade A supply prompted the property owners to increase rents in this micro market, which grew by an average of 12.9% YOY.

 
13.6%

 

Gurgaon - Cyber City

Being an established IT hub in NCR, Cyber City continued to draw tenants because of its locational advantages and good infrastructure. Continued occupier preference coupled with low vacancy rates in this micro market pushed the average asking rents by about 13.6% on YOY basis.

 
12.5%

 

Bengaluru - EPIP/Whitefield

This micro-market in eastern Bengaluru witnessed the strongest rental growth of 12.5% YOY. Many occupiers who were already operational here, executed expansion strategies and consolidation within this micro market leading to strengthening rentals. Availability of large floor plates and Grade A developments has been instrumental in attracting occupiers to consolidate operations in this market.

 
11.0%

 

Pune - Hinjewadi

The IT revolution has powered the commercial as well as residential growth in Hinjewadi. As several IT companies have mushroomed, there has been a steady demand from the office occupiers. Consequently, constant demand along with low vacancy in Grade A buildings entailed an escalation of 11% in asking rents in this micro market.

 
10.0%

 

Chennai - CBD

Chennai’s central business district (CBD) noted a YOY rental appreciation of 10% in 2016. As occupiers across various sectors continued to prefer maintaining front line operations in locations such as Teynampet and Greams Road to maintain visibility. Primarily, small ticket sized transactions in premium office spaces led to this rental uptrend.

 
9.5%

 
NOIDA - Institutional Sectors (IT)

Noida institutions sectors that include Sector 16A, 62, and sectors along NOIDA expressway 125-142 witnessed rent growth of about 9.5% YOY. The area witnessed rental growth primarily because a few select grade A buildings demanded a premium over average rental values due to healthy occupier demand.

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