The Weekly Hive
NECTAR
Location matters more than ever in Commercial Real Estate
The past two-three years have been extremely exciting for the real estate sector, especially the commercial segment. As the impact of the pandemic began to fade out, leasing volumes across the major cities picked up. The vacancy level has also gone down considerably while the supply pipeline seems healthy for the coming quarters. The retail sector exhibited a strong rebound with high streets and malls witnessing an uptick in rental and leasing. Similarly, the office segment witnessed a surge in demand for Grade A properties and Flex spaces, owing to back-to-office-drive and extensive expansion plans by a lot of corporates.
While all these factors have been instrumental in the growth story of commercial real estate, the role of location remains paramount for both the developers and occupiers. The past year witnessed some of the biggest land deals where some of the biggest developers acquired large land parcels for their ambitious projects. On careful observation, it can be deduced that all these acquisitions were influenced by locational advantages like the land situated in proximity to a developed micro-market or near an important corridor.
As per a report, the office market in Bengaluru witnessed around ~6 MSF of gross leasing and a healthy project completion of around ~3 MSF in the last quarter of 2022. It is worth noting that location played an important role in this performance. The Outer Ring Road, which is an important corridor of commercial real estate development, accounted for the majority share in quarterly supply, followed by the Peripheral East. Similarly, the suburban East, North-West, and South also contributed immensely to the office market and leasing volumes, thus giving a clear view of how locational advantages are driving the overall growth of Commercial Real Estate. In the retail segment, prominent hubs like Brigade Road, Commercial Street in central Bengaluru, and HSR Layout 27th Main in South Bengaluru witnessed 3-5% q-o-q rental growth backed by strong demand.
In other micro markets of major cities, a lot of commercial real estate developments are concentrated around the key metro corridors, highways, and expressways. Connectivity remains one of the key factors in deciding the success of a commercial project. In retail, for example, both the developers and occupiers consider the prospect of footfall, and good connectivity to the location alone can decide the long-term success of the property.
Similarly, the office market also is guided by locational factors. A corporate always prefers to take up space in a project which is either located in a central business district or has good connectivity. Big corporates and IT MNCs always eye for locations like Electronic City, Whitefield, and Marathahalli which are connected by the National Highways. The presence of prominent business parks like JP Software Park, Velankani Tech Park, Gayatri Tech Park, Brigade Tech Gardens, MFAR Silverline Tech Park, Novel MSR Tech Park, RMZ Eco space, Vajram Esteva, and Embassy Tech Park, and a lot of other office parks always attract the leading corporates to open and lease offices there.
To conclude, it can be rightly inferred that location has always been a growth driver for real estate development and the success of any commercial development can be attributed to the factors that govern connectivity and access to these properties.
THE BUZZ
Micro-Investing platform Deciml raises Bridge Funding Round
Deciml App , the Pune-based micro-investing platform, has raised a bridge round of funding from a diverse group of influencers and companies. This #funding round is an addendum to the #preseed round raised in 2022 of $1 million from strategic #investors that includes #venturecapitalists, #entrepreneurs, and #innovators.
Founded in 2020 by CFA Level 2 and experienced entrepreneur Satyajeet Kunjeer , who has been working to encourage more young Indians towards savings and simplify their entry into the investment ecosystem.
Story Courtesy: Indian Startup News
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