Return to work from office spurs space demand, says Prestige Estates
Informist, Tuesday, Sep 12, 2023
By Reshab Shaw and Narayana Krishna
BENGALURU/HYDERABAD - The demand for office space in India is expected to bounce back soon, and the country could well face a space crunch if all companies return to work from office in full strength, said Jagdeep Singh Marwaha, chief executive officer of Prestige Estates Projects Ltd's Prestige Office Ventures.
"There is a considerable amount of demand from companies for office space," Marwaha said in an interaction with Informist. "Now if they all (employees) come back to work, there is no (office) space for them. So it's a matter of time that office markets will again come back, bounce back."
He said the overall retail demand for space has already reached pre-COVID levels as malls, shopping centres and multiplexes are operating at full capacity, while office space demand is picking up gradually. The demand for hotels and conference centres is also back, driven by the G20 mega events and associated conferences in recent months.
Work from home had taken centrestage during and since the pandemic but many companies have hired 20-30?ditional workforce during the last three years, and all these employees are coming to office, boosting the demand for office space, Marwaha said.
Major corporations are now pushing for a return to the physical office, spurring renewed demand for office space, he said. Manufacturing, healthcare and global capability centres in information technology are the key drivers of the demand for office space now, he said.
Amid this abundant opportunity, Marwaha said that the Bengaluru-headquartered realtor will lease out 2.0-2.5 mln sq ft office space in the current financial year ending March. He said the overall sector is likely to have leased out around 39-45 mln sq ft office space across India during the year. The comparable year ago numbers were not detailed.
"In the next five years, we're building about 40 mln sq ft of office space," Marwaha said. Of these projects, about 55-60% are to come up in Bengaluru, the company's largest market. The other projects will come up in Mumbai, Hyderabad, Chennai, Pune, Delhi, and the National Capital Region.
The company recently entered Mumbai and claims to be building India's tallest office tower in the upscale Mahalaxmi area. The 3-mln-sq-ft property in India's financial capital will be ready by January 2028, Marwaha said. Another commercial office project, the 4.5 mln sq ft Prestige 101 BKC, is under construction, and will be ready by the end of 2026, he said.
In Hyderabad, the company recently inaugurated Sky Tech, a 2-mln-sq-ft office property. "We are actually now filling up that building. And I think by the year-end, we will fill one tower up, which is 1 mln sq ft," Marwaha said.
At 1226 IST, shares of Prestige Estates traded at 619 rupees on the National Stock Exchange, down 4.1% from previous close. End