BENGALURU: The world’s largest private equity manager Blackstone’s Indian real estate joint venture Embassy Office Parks will invest $750 million, or around Rs 5,000 crore, in the next three years as technology services boost office space absorption in cities such as Bengaluru, Hyderabad, Chennai and Pune.
The equal joint venture between Blackstone and property developer Embassy Group will build an additional 16.5 million sq ft of office supply across these four cities, mostly through debt financing, Mike Holland, CEO, Embassy Office Parks, told media. Robust demand and supply constraints have seen vacancy levels dipping to just 4.1% in Bengaluru and 5% in Pune. This stands in stark contrasts to Delhi and Mumbai markets where vacancy levels are at 32% and 19.5% respectively amid a supply glut, industry data showed.
Embassy Office Parks currently has operates a leased portfolio of 20 million sq ft and plans to almost double this in the next three to five years, making it probably the biggest ongoing capex program in Indian commercial real estate. More than 2.3 lakh people -mostly from MNCs and well funded Indian startups -work from the company’s current office portfolio at present.
“The big landlords will want to optimize their returns in markets like Bengaluru, Pune and Chennai which has tight inventories leading to a run up in rentals,” Holland said. “Bengaluru is maintaining the momentum after record absorption last year, while Chennai and Pune will benefit from limited upcoming supplies,” he added. MNC occupiers will have their eyes on Hyderabad which has the biggest upcoming supply among the four above mentioned cities.
The country’s tech capital Bengaluru was on track to lease 10.5 million sq ft this calendar on par with a five year average.
Credits ET Realty