Strong Office Realty Market
Savills, a global real estate service provider established in 1855, has presence throughout the Americas, Europe, Asia Pacific, Africa and the Middle East. Bhavin Thakker, Country Manager, Tenant Representation, Savills India, talks to Realty Plus about the commercial real-estate and Company’s property services.
What are Savills service offerings and its set-up in India?
Savills plc is a global real estate services provider listed on the London Stock Exchange. It offers a broad range of specialist advisory, management and transactional services to clients all over the world. We have an international network of more than 700 offices and associates throughout the Americas, the UK, continental Europe, Asia Pacific, Africa and the Middle East. In India, the company has made its presence recently opening its first office in Bengaluru followed by offices in Mumbai and Delhi. We follow a hub and spoke model of operations here and have also executed assignments in cities like Pune, Hyderabad, Chennai and Kolkata.
We currently provide two service lines in India. One is tenant representation or in simple words office brokerage and the second is project management. There is a strong occupier’s demand in the office space segment in cities like Mumbai, Delhi- NCR, Hyderabad, Chennai, Bangalore and other prime cities. We represent clients and look into their demands for space based on their current space needs, potential growth pattern, skilled workforce requirements and the peer businesses locations among others. There is a sustained demand from IT, Pharma and financial sector for office space and we are presently focussing only on office space leasing and office project management services. In Hyderabad, Chennai, Bengaluru, Gurgaon, Pune, majority of office occupiers are technology organizations. Mumbai being a price sensitive market does not have many technology occupiers.
What are the office occupier’s requirements while leasing a commercial property?
They want a fair price for a quality building that has a good efficiency ratio. Corporates generally require large floor plates, few floors or an entire building. They also prefer to deal with a single property owner. Property location, access, parking and amenities present in the building are other important factors. Most technology firms would like to lease a campus which is equipped with facilities like a cafeteria, ATM, general store etc. so that they can focus on their core business. In fact, as companies are getting matured in their operations, they identify what is important for their staff and employees and accordingly select the office premises.
What is the current real-estate investment scenario in India?
From an investment stand point, there are a lot of opportunities right now especially in the office sector which has seen robust demand and we see that momentum continuing in the near-term. International firms like Brookfield, Blackstone and GIC Singapore have invested in office parks across Bengaluru, Hyderabad, Gurgaon and other major cities. Retail sector too has a bright potential for attracting domestic and international investments. REITs will further boost the real-estate investments with the common man being able to invest safely through REIT avenues.
What is the future growth prospect for Indian commercial real estate in India?
Since 1991, India has seen sustained growth in demand for commercial real-estate. The demand has been consistent in cities like Bengaluru and Gurgaon The oversupply of office spaces in these cities has never lasted beyond one year and mostly there has been an undersupply of Grade-A office real-estate. In Hyderabad, Bengaluru and Gurgaon there is a crunch in supply as typically buildings take three years to complete and provide supply of fresh inventories. With increasing demand and limited supply, the prices would either remain stable or both capital values and rental values will go up.