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OYO Workspaces forays into Chennai

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Co-working solutions provider OYO Workspaces announced its entry into Chennai with the launch of its two brands — Innov8 and Workflo. Innov8 is a premium offering of ergonomically designed workspaces, while Workflo is a budget-friendly, functional co-working solution.

The first 400-plus seater Innov8 centre is located at SKCL Techsquare at SIDCO Industrial Estate in Guindy while Workflo’ first 1,000-plus seater centre is located at Greeta Towers in Perungudi.

The Innov8 centre offers private offices starting from ₹13,000 and cost per seat starting from ₹9,000 plus taxes per month. Workflo’ private offices starts from ₹6,500 and cost per seat from ₹5,000 plus taxes per month.

“We have received a phenomenal response for the inaugural centres of both our Innov8 and Workflo brands and will be keen to support many more start-ups and large companies with customised solutions in the city,” Ankit Gupta, Chief Operating Officer & SVP – Frontier Businesses, OYO India and South Asia was quoted in a press statement issued by OYO Workspaces.

Credits: thehindubusinessline

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Commercial Property

Commercial Office Space Sector Takes Pole Position In Indian Real Estate

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The budget focused on boosting consumer demand, infrastructure development, rural income and manufacturing. Amidst economic gloom, Indian office real estate market performed exceedingly well as compared to other asset classes in this sector during 2019. 

The office market has witnessed multiple large ticket transactions and attracted a substantial amount of investments from various global institutional investors and sovereign wealth funds. In 2019, office assets when compared to residential assets offered high growth and stable returns. 

India’s office leasing proportion rose by 40% Y-O-Y, to an all-time high of 51.6 million sq. ft in 2019. 

 A joint venture between Allianz Group and Shapoorji Pallonji Group saw an acquisition of 2.3 million sq. ft IT SEZ for INR 1,800 crore in Hyderabad. Foreign real estate entities also put up a major show in the Indian real estate spectrum. Tokyo-based Sumitomo Corporation acquired a three-acre plot in the high-profile BKC area for a whopping INR 2,238 crore, where it plans to build an office complex, while the Blackstone Group, an American real estate private equity firm procured the ‘One BKC’ office building for INR 2,500 crore.

These stratospheric investments in the office real estate market speak volumes of the credibility of the Indian real estate sector even in its trying times. 

2019 was a landmark year for commercial real estate. India registered its first REIT in March 2019 when Embassy Office Parks REIT, a joint venture of Embassy and Blackstone Group raised around INR 4,750 crore, in office space with 33 million sq. ft portfolio. It became the largest REIT in Asia. 

India’s office market in 2020, started on a positive note too. DLF leased out around 2 lakh sq. ft office space to social media giant Facebook in Gurugram.

Office space market dynamics

Indices2016 (mn sq.ft)2017 (mn sq.ft)2018 (mn sq.ft)2019 (mn sq.ft)Y-o-Y Growth2019 (%)
Net Absorption33.528.733.246.540%
New Completion36.528.735.751.645%
Vacancy15.1%14%13.5%13%

Source: JLL Research 

Note – Top seven cities are included – Delhi NCR, Mumbai, Bengaluru, Chennai, Hyderabad, Pune and Kolkata

Net absorption of office space across top seven cities grew at 40% Y-O-Y, reaching an all-time high of 46.5 million sq. ft in 2019. Almost 52 million sq. ft of Grade A office space was completed in the FY19, which is 45% growth over FY18. 

In the last half a decade, the office market has witnessed the lowest vacancy level at 13% in 2019. This robust growth in demand for office space is mainly led by IT/ITeS and co-working operators in cities with developed infrastructures. The current momentum in net absorption of office space is expected to continue in 2020, due to a foreseen recovery in economic activities.

The IT/ITeS sector accounted for 42% of total office space leased followed by co-working operators at 14% and subsequently followed by BFSI and Manufacturing/Industrial. Office space leased by co-working operators increased significantly from 8% in 2018 to 14% in 2019 among all sectors. Today there are more than 1,000 co-working spaces in India, making it is the second largest co-working market in the world. The demand for co-working spaces are not only driven by start-ups, but also by bigger enterprises and MSMEs.

City-wise net absorption of office space 

Source: JLL Research

In 2019, Hyderabad, Delhi-NCR and Bengaluru cumulatively witnessed around 70% of total net absorption of office space. Despite muted growth in Q4 2019, Hyderabad registered almost three times net absorption at 10.5 million sq. ft in 2019 against 2018. 

The thriving IT sector in Hyderabad was the main reason behind the surge in demand for office space. With net absorption standing at 10.8 million sq. ft in 2019, Delhi-NCR market took the crown as the leading city in average office space absorption since 2010. Mumbai, Bengaluru, Chennai, and Pune market witnessed decline in overall leasing activity in 2019 in the range of 2-12%.

Strong demand supported the high rental growth prospect in Hyderabad, Bengaluru, Delhi-NCR, and Pune. These cities registered an average rental yield of 5%. The demand for Grade A office space is high in Mumbai but availability is low. This shortage of office space has shot the average rent upwards. Investors are showing great interest in premium office space in Bengaluru and Hyderabad and these markets are also witnessing strong pre-commitment. 

The commercial office sector in India is in a good space, even in a still-recovering real estate market. Flexible work patterns, improved work productivity and cost effectiveness have fuelled the co-working business. 

It is expected that by 2025, around 42% of the Indian population will work in urban centres, and hence the demand for office space will shoot up. This development augers well for the real estate market which is witnessing a paradigm shift in the office space market. 

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Commercial Property

Puravankara Ltd has reported a 41 percent decline in its consolidated net profit

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During the April-December 2019 period, the realty firm’s net profit increased to Rs 88 crore as against Rs 75.57 crore a year ago.

Realty firm Puravankara Ltd has reported a 41 per cent decline in its consolidated net profit at Rs 16.10 crore for the quarter ended December. Its net profit had stood at Rs 27.18 crore in the year-ago period. 

The company’s total income also fell to Rs 528.11 crore in the third quarter of the current financial year from Rs 565.66 crore in the corresponding period of the previous year, the Bengaluru-based firm said in a regulatory filing. 

During the April-December 2019 period, the realty firm’s net profit increased to Rs 88 crore as against Rs 75.57 crore a year ago. 

Total income in the first nine months of 2019-20 rose to Rs 1,797.47 crore from Rs 1,459.64 crore in the corresponding period of the previous year.

Source: PTI – Realitynxt

(Note: The story has been published without modifications to the text. Only the headline and intro have been changed.)

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Commercial Property

Godrej Properties will acquire 26.58 acres land in New Delhi from the Railway Land Development Authority

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The land parcel will be purchased from the Railway Land Development Authority and is situated in the city’s Ashok Vihar area.

Godrej Properties Ltd on Monday said it will acquire 26.58 acres of prime property in the national capital for  ₹1,359 crores.

Terming it one of the largest land transactions in recent past, the Mumbai-based real estate developer said the acquisition value of  ₹1,359 crore will be paid in instalments over several years as stipulated in the tender documents.

The land parcel will be purchased from the Railway Land Development Authority and is situated in the city’s Ashok Vihar area.

“Spread over 26.58 acres, this development will offer about 3 lakh square meters (3.28 million sq. ft.) of development potential and will be developed as a luxury group housing project. The site is surrounded by parks on three sides offering stunning park and city views,” the company said in a statement. 

“We believe this project in central Delhi is one of the most exciting projects in our development portfolio and will contribute significantly to the growth of our business in NCR. We will seek to ensure a landmark project that delivers an outstanding lifestyle for its residents,” said Pirojsha Godrej, executive chairman Godrej Properties, said.

This is the company’s second project in Delhi after the launch of Godrej South Estate in Okhla in 2019. Godrej Properties has developed many residential projects in other parts of the national capital region, including Gurgaon and Noida.

At 0943am, shares of Godrej Properties were down 0.5% at ₹1,135 rupees on the BSE.

Source: LiveMint

(Note: The story has been published without modifications to the text. Only the headline and intro have been changed.)

Credits: Realitynxt

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