Member Article

Jagmohan Garg discusses the significant increase in pre-commitment for commercial space

Jagmohan Garg, a leading Delhi-based realtor, states that the last few years have witnessed a significant increase in customer’s interest in commercial spaces. The rise in pre-commitment levels in key office markets holds a testimony to this. Also, the pre-leasing activity is gaining momentum, not only for commercial projects to be completed this year, but also for the projects scheduled to be completed in the upcoming two years. Realty experts have observed that commercial projects are bought or leased closer to the project’s completion date, which is not the case in residential properties. Also, stronger pre-commitments from occupiers indicate an uptrend in the realty sector.

As a matter of fact, Pune has witnessed the highest pre-commitment levels among Indian office markets. The city’s pre-commitment activity was 48%, which is almost half the total supply expected during 2017.

Recent reports show that Bengaluru has 39% of its total supply coming through 2017 pre-committed. On the other hand, cities like Mumbai and Delhi-NCR have also recorded pre-commitment levels of 33% and 22%, respectively. “It is estimated that the next two years will experience similar trends,” predicts Jagmohan Garg, the owner of Mera Baba Group. Also, pre-commitment activity can also be seen in Mumbai and Delhi NCR’s projects, which are to be completed in 2019. Mumbai has a pre-commitment level of about 17% for projects getting completed in 2019.

The real estate statistics for 2018 shows that Pune already has 29% pre-commitment and the figure for Bengaluru stands at 26% followed by Mumbai at 15% and Hyderabad 7%. According to Ramesh Nair, CEO & country head, JLL India, “In Pune, pre-commitment activity is being mainly led by IT-ITeS and BFSI occupiers while in Delhi-NCR, it is mainly driven by IT-ITeS occupiers. In Mumbai, a wider spectrum of occupiers from BFSI to IT, telecom and healthcare are driving this trend. Hyderabad too is seeing similar activity, thanks to rising interest from occupiers from information technology, consulting, telecom and healthcare sectors,”

Considering the recent trends, Jagmohan Garg of Delhi says, majority of the customers prefer pre-committing in projects, which are expected to get completed within a time span of two years. The improvement in business outlook along with the ongoing uptrend in rentals for office properties has attracted a number of customers, looking forward to secure their future space requirement in suitable locations and projects. This has certainly widened the horizon of real estate sector.

This was posted in Bdaily's Members' News section by advir karamey .