GURUGRAM, India, May 21, 2019 /PRNewswire/ --
As per Colliers International, while Bengaluru will likely remain the first choice for GICs, occupiers may consider Hyderabad, led by its ease of doing business, talent pool and quality upcoming supply. As of 2019, India is the undisputed leader in the GIC market led by a change in strategy among multi-national companies (MNCs), further aided by competitively affordable rents in certain markets (that offer sub-dollar rentals), a strong IT infrastructure, tax breaks and a highly skilled, English-speaking talent pool.
"With technology investments imperative to future growth, we expect occupiers will continue to invest in GICs, especially to develop Centers of Excellence (CoE), as Research & Development (R&D) hubs, and innovation centers. We foresee GIC leasing to be in the range of 30-35 million sq ft, between 2019-2021, across the top six cities of Bengaluru, Chennai, Delhi-NCR, Hyderabad, Mumbai and Pune," said Ritesh Sachdev, Senior Executive Director, Occupier Services at Colliers International India.
As per Colliers Research, energy and chemical companies are considering Mumbai, and tech and consumer electronics companies are looking for options in Delhi-NCR for GICs. It is suggested that suggest pharmaceutical companies especially consider Hyderabad, where the government is developing a Pharma City to create a healthcare ecosystem of companies. Pune is also a top pick for GICs for financial companies led by its proximity to Mumbai, competitive cost and diverse talent pool. Colliers urges companies to pre-commit to space in Pune, as the vacancy rate is only 5.2% as of Q1 2019.
"Over the next 3 years, we estimate GIC leasing to drive overall leasing activity, especially led by the sheer number of large deals that such centers require. In the last five years, leasing by GICs touched 53.0 million sq ft, cementing India's leading position as the world's global center", says Megha Maan, Senior Associate Director, Research at Colliers International India.
Companies scouting for space for GICs, especially in the innovation, CoEs and R&D fields, typically align their workplaces to global corporate benchmarks in terms of environment, health and safety standards. Since GICs typically lease large spaces, above 100,000 sq feet, and must adhere to these standards, it is recommended that they set up and/or expand their operations in the suburban and peripheral areas of major cities, as seen in the table at right. Colliers also foresees companies building campuses in peripheral locations in major cities, and in Tier II cities like Vadodara in Gujarat,Thiruvanathapuram in Kerala, Coimbatore in Tamil Nadu, and Visakhapatnam in Andhra Pradesh. It is expected that availability of talent will be at low attrition rates , cost arbitrage, and a conducive policy environment enabled by certain state governments to drive demand by the IT industry in Tier II cities.
About Colliers International Group Inc.
Colliers International (NASDAQ: CIGI) (TSX: CIGI) is a leading global real estate services and investment management company. With operations in 68 countries, our 14,000 enterprising people work collaboratively to provide expert advice and services to maximize the value of property for real estate occupiers, owners and investors. For more than 20 years, our experienced leadership team, owning more than 40% of our equity, have delivered industry-leading investment returns for shareholders. In 2018, corporate revenues were $2.8 billion ($3.3 billion including affiliates), with more than $26 billion of assets under management.
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