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Nucleus Office ParkOperating platform for wholly owned office properties of India’s largest commercial real estate owner Blackstone GroupA top company official said, it has taken over 7.50 lakh sq ft on lease in commercial projects across its pan-India portfolio so far this year and these leases are expected to generate revenue of over Rs 1,100 crore annually.
The operating platform has completed new office projects spread over 2.5 million square feet including its development MumbaiThe Outer Ring Road (ORR) of Lower Parel, Bangalore and Gurgaon, taking its total portfolio size to over 22 million sq ft.
The demand for commercial real estate is witnessing a steady improvement post the COVID-19 pandemic and the company has already committed over 15% of its new supply.
“Our business is essentially a mirror image of what is happening in the economy… We have been able to demonstrate a strong leasing performance and achieve this type of numbers only because the economy continues to expand and grow. running the business.” Kaiser ParvezCEO, nucleus Office Parks told ET in an exclusive interview.
Following the outbreak of the pandemic, the Indian commercial real estate market had witnessed slow growth due to mobility restrictions and work-from-home options offered by companies.
“This year is proving to be a recovery year. In the first half of 2022, the Indian office market has already seen a gross absorption of 28 million sq ft, which was the number achieved throughout 2021,” said Parvez, adding that a significant portion of Nucleus’ fresh leases will be based on Mumbai properties. was in
The operating platform has a total of 18 properties in the top five property markets of the country including Mumbai, Bangalore, NCR, Chennai and Ahmedabad.
Apart from these, the US-based private equity major also owns over 110 million square feet of commercial property in the country through its joint ventures and tie-ups with Indian developers.
“Each of our properties are uniquely positioned in specific micro-markets and are able to attract rental premiums over the rest of the supply in that region,” Parvez said.
According to him, rentals in key markets like Mumbai have seen a rise as demand is strong and supply is restricted as construction costs have seen a significant increase, affecting project completions.
“The falling vacancy levels in key markets are a sign of a combination of rising demand and restricted supply, which has started pushing rentals higher. For example, rentals in Mumbai have increased by 2.6% in the last two quarters,” he said.
Based on appointments in the last 18-24 months, the incremental demand for office space from the top five IT companies is expected to be around 11.67 million sq ft over the next two years, when the offices open at full capacity. India’s top five IT companies have reported hiring around 260,000 new employees during the period April 2020 to September 2021.
According to Parvez, the IT sector continues to hold steady as both global and domestic companies have gained large office spaces in the past few months indicating a strong return to leasing momentum.
On the performance of the office market, all the top eight cities recorded 25.3 million sq ft of transactions during the first half of 2022, while office completions registered 24.1 million sq ft during the same period, data from Knight Frank India showed. Is.
Bangalore and Pune office markets registered maximum annual growth of 13% and 8% respectively in rental value due to higher demand. Hyderabad, Mumbai and NCR also saw a marginal increase in their rental values while Chennai, Ahmedabad and Kolkata saw rental prices remain stable.
Blackstone has emerged as the most aggressive institutional investor in India, with net assets under management estimated at $60 billion across various sectors, making it one of the top 10 business groups in the country. About $20 billion of this market value is in real estate in its 42 investments.
It owns the largest office and retail assets in India with an office portfolio of 135 million sq ft and over 10 million sq ft of retail properties and 40 million sq ft of logistics space.
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