Business centers mushroom to meet shortage of office space
Corporates are in the process of setting up their own offices and headquarters, reports Gurbir Singh.Updated: Apr 14, 2007, 01:24 IST
The continued shortage of good quality office space in metros has led to the mushrooming of business centers offering serviced office space in the major metros. While corporates are in the process of setting up their own offices and headquarters, they may have to pay as much as Rs 50,000 to 1.4 lakh per seat per month in Mumbai and Rs 30,000-40,000 per month in Delhi for such facilities.
In cities that have rapidly expanding business districts and where new entrants and expanding business groups have made pre-lease bookings with developers, the trend is to set up ‘incubation centers’ by these developers to allow their clients carry on business till their own offices are ready for occupation.
“Such provisions range between 15-30 percent of total space commitments by a client with rentals around 70-100 percent of the prevailing market rate,” says a report on these business/incubation centers by property consultant Cushman & Wakefield.
According to the report, South Mumbai’s business areas offer a wide choice including Hermes Business Center, DBS and Appejay Business Center. In the North, the business center chains include Regus and House Fin Bhavan.
The high revenue business has also caught the eye of star hotels who are offering fully souped up rooms and centers as business locations at phenomenal rates ranging from Rs 1 lakh to Rs 1.4 lakh per seat per month.
The shortage of office space in Delhi has been exacerbated by the municipal corporation’s drive in recent months to seal and demolish illegal constructions, particularly on the outskirts of Delhi. Among the business centers leasing good quality space include Regus, Paharpur, DBS, Gesco and Chintels.
According to the Cushman report, established developers like Vatika and Logix are also incorporating serviced office space within their complexes. This is to encash the growing demand for such space and also to offer facilities that will strengthen the loyalty of their clients.
In Bangalore, despite a massive supply of around 13 million square feet of office space coming in this year, a shortage of good quality commercial property in prime locations still persists. In central business districts ( CBDs), business centers are on offer by DBS, Pan Asia, Golden Square and Regus in RMZ Mellenia and Raheja Towers. Average rates for ‘A’ class space vary between Rs 18,000 and Rs 30,000 per seat per month, estimates the Cushman report.
Shortage of office space in Hyderabad, especially of the non-IT variety, is felt in specific new-growth locations like Hi-Tec City.
The two main business centers operating are DBS in Secundrabad and Hyderabad International Convention Center (HICC) at Hi-Tec City. Rates vary in the Rs 20,000-25,000 per seat per month. The Regus and Vatika chains have proposed centers in the Banjara Hills.