Small offices demand up
As the world looks up at India for its growing economic importance, local small entrepreneurs are empowering themselves to seize the rising opportunities.business Updated: Jan 31, 2010 22:42 IST
As the world looks up at India for its growing economic importance, local small entrepreneurs are empowering themselves to seize the rising opportunities.
As a result, demand for small offices is increasing in metro cities and many developers are catering to this segment.
There is no independent estimation available on this segment because real estate consultancies normally concentrate on large deals and the fragmented developers hardly collate data.
At a time when commercial realty is saddled with excess supply, the creation of fresh demand from a segment that has been operating from homes or industrial sheds has come as pleasant surprise.
“This (small offices) may be a small percentage of our portfolio, but the demand is rising. People are shifting due to inspirational values,” said Hemant Shah, CMD, Akruti City, a Mumbai-based real estate listed company.
“India is base of entrepreneurs and people who initially started operating from 300 sq space in their homes or from joint spaces with few staff are scaling up. Of late, we have started building small offices which are 1,500 to 2,000 sq ft in size,” Shah said.
Several other developers have also joined the bandwagon.
“Companies which were looking at office spaces above 5,000 sq ft are now settling for less than half that area and this is having a ripple effect on the demand for small offices.” Dilawar Nensey, joint managing director, Royal Palms Estates, which is betting big on small offices.
Royal Palms has sold over 200,000 s ft of commercial space comprising of small offices and shops between August 2009 and now. Most of the demand has come from micro small and medium enterprises seeking 400 sq ft to 1,000 sq ft space. There are about 1,600 offices operating from the estate and the company plans to sell another 1,600 offices by 2013.
In Mumbai and elsewhere, several mall owners are contemplating to lease out or sell office space to small entrepreneurs deal with the problem of large scale vacancy in prime spaces.
Malls are ideal as they conveniently located and have ample space for parking.
Experts feel that the demand for small offices would nullify the stagnation in commercial realty to certain extent.