The country is abuzz with several entrepreneurial ventures. Every entrepreneur looking to start a new venture, or expand a fast-growing one, is on the lookout for office space, preferably in a business centre with coffee shops and restaurants.
“Garage Inc” may sound cool but which first-time entrepreneur will be content with working out of dingy “commercial complexes” or a cramped cabins amidst a labyrinth of concrete marketplace.
While huge office spaces are coming up in Gurgaon, Noida, Dwarka Expressway, Greater Noida Expressway and Sohna Road, they mostly cater to corporate houses and MNCs who typically purchase or lease large areas, which shows up well on the absorption figures. Some developers say the demand for such spaces is high, but the supply is not reaching fast enough.
“There is a shortage of Grade A office space in Delhi and the supply is almost non-existent. Real estate business is compelled by compulsion and while we expect such demand to rise, land availability is a constraint,” said Neeraj Gulati, MD, Assotech Realty, who has developed office properties across several segments in the NCR.
Rajeev Sharma, has been operating his CA firm from a residential area in South Delhi for over seven years now. He is constrained by the fact that such spaces are not readily available. Even if vacancies arise, the supply-demand gap is so high that the lease terms are not cost-effective for his business.
“Even though my profession is permitted to be run from a residential area, I have been thinking of moving to a nice office complex which has good amenities and is modern in its approach. But there are no properties available and the ones that are available, are too expensive for me,” said Sharma.
Some developers are now waking up to this opportunity. Realty major DLF is currently developing such a space in Okhla, New Delhi. Ananta Singh Raghuvanshi, executive director-sales and marketing. DLF says that they have seen strong demand for their ongoing Prime Tower project in Okhla.
“Nowadays no one wants to operate from a residential area and people are looking for commercial hubs that have been sanctioned, approved and created and where they can buy an office and start their operations. That is something that most entrepreneurs and professionals are looking for. They do not ask for too much space and they need 500-1,000 sq ft, they need a business centre, coffee shops, restaurants, etc,” said Raghuvanshi. “Both first generation entrepreneurs and second and third generation of business families are buying such spaces for themselves.”
While in Delhi and Mumbai land availability may be an issue for developers, there are others who expect a surge in demand in micro-markets or established suburbs that are not too far as small enterprises and entrepreneurs like to operate from there. They, however, feel that they will wait for that demand to rise before they start developing it.
“The office space demand is still mostly from the MNCs and the demand for smaller office spaces is only a small percentage of the total demand. We expect a rise in demand for such place from small enterprises and entrepreneurs as they like to operate in established micro markets or established suburbs,” said P Sahel, vice chairman, Lotus Greens who thinks that their office developments are capable of converting the space to cater to small businesses too.” While big offices can be converted into smaller offices, I think that once demand increases, developers will develop space keeping that in mind.”