Office Space a Boon By Neeraj Gulati, MD, Assotech Realty Pvt Ltd.

Superior grade office projects are set to see faster space take-up with established office corridors likely to be preferred more compared to others. While a larger portion of demand is likely to originate from the fast-growing IT/ITeS sector, the banking and financial services industry is also likely to see faster growth.

Investing in office buildings can be very profitable. One can expect a high rate of return from the start, which generated cash flow till the original mortgage is paid off, the net income is a sufficient for retirement plan by itself. Buying an office or retail space is a huge investment, which is why commercial real estate has been traditionally seen as an asset class that only institutional investors or heavyweight HNis could invest in. However, things and trends are changing. With flexible payment options and defragmentation of carpet area, many retail investors, individuals are now getting into the office real estate game. In comparison, India’s collective office space stock accounts for only 375 million square feet. This showcases the long-term potential for office space at all levels. A look at the three-year forecast at a pan-India level and for the top seven cities indicates that the space acquisition is likely to take place at a slightly

faster pace in 2015, due to the slowly improving global headwinds and the likely positive change in the investment and economic climate in India. Another important point for occupiers to understand is demand polarisation based on asset quality.

Superior grade office projects are likely to see faster space take-up with established office corridors likely to be preferred more compared to others. While a larger portion of demand is likely to originate from the fast-growing IT/ITeS sector, the banking and financial services industry is also likely to see faster growth. It is hence likely that the cities of Bengaluru, Delhi-NCR and Mumbai will remain the top three preferred cities for occupier growth. While consolidation and relocation strategies will dominate in the short-to-medium term, expansion-driven growth is expected over the long term. A wider mix of corporate occupiers in terms of industry profile is also expected, as a proactive, investor-friendly Government at the helm is likely to enhance investments in the industrial and manufacturing sectors in coming years as can be seen from the allocation of Rs 70, 000 crore fund for the infrastructure sector in the Union Budget 2015-16. Like any other investment proposition, there are risks with office buildings too. The biggest one is simply that the rental rates can go up and down with the economy.

Hence it is suggested to go for long-term leases that would reduce this risk to a certain extent. As the long lease periods that are common are one of the attractions of this kind of investment. Identifying this as a potential segment, which has a promising high return on investment many developers these days started exploring this segment. NCR has been providing office space properties at many affordable prices with superior infrastructure. One can find a lot of options in buying property according to what one needs and is specifically looking for. Regions like Noida Expressway and Yamuna Expressway offer huge options as per the varying needs of buyers.

Here office spaces are available with easy access to hospitals, banks, highway connectivity to the national Capital thereby, making an investment here that can be cherished roughout Life for the buyer. In the lights of this, Assotech Realty has launched ‘Assotech Business Crestera’ at Sector 135, Noida Expressway; an integrated business park along with Service Residence units christened as ‘Sandal Suites’ for which the company has tied up with an international hospitality brand Lemon Tree Hotels to manage and operate its serviced residences. The property will give a return on a lease-back option. In the reality spectrum, we are considered to be the frontrunner in the NCR market to come up with a unique mixed-used development project that would be heralded across Northern India.