Figures of Office relocations double in the first half of 2013

Numerous businesses, both foreign and Indian, are using the slowdown within the real estate segment of office spaces to relocate their respective offices to locations wherein all their businesses can come under one roof and that too at lower rentals.

As per study conducted by internationally acclaimed real estate experts, within the first half of 2013, relocation along with consolidation of office space have more than doubled as compared than last fiscal and companies have managed to substantially reduce their rents.

Several companies are opting to relocate and consolidate their respective office spaces which ushers in better efficiency and economies of scale. By doing so, companies are able to reduce their rentals anywhere from 25 to 50 per cent.

Over the last 15 years ever since the boom began, the Indian office market has considerably matured. The geographical dynamics within these years, have changed quite a bit though. Over the years, in several areas such as the NCR and within Mumbai, city centers have been moved.

As per real estate experts, the current market rentals are low but are steadily on their way up. Hence, this is an opportune time for companies to consolidate their respective office space. Furthermore, presently, in order to achieve cost benefits, companies are willing to go farther away. Moreover, since leasing is generally slow at the moment, good spaces are available at comparatively lower rentals.

For instance, Real estate firm SARE recently leased a new office building within Gurgaon where it now occupies 26,000 square feet of usable area compared with 15,000 square feet that it was using within two different offices that were about twenty kilometers apart; while one was located at Delhi’s Nehru Place area, the other was in Gurgaon.

As per the chief operating officer at SARE, the company was able to reduce their per square feet rental cost by almost fifty per cent and the new office space takes care of their growth for the next three to four years. Furthermore, the company has been bequeathed with improved work spaces, since it’s a new building.

In NCR:

The crown for being the prime central business district which was held by Connaught Place has now been bestowed up on other locations such as Noida and Gurgaon. This shift has been caused due to the shift in business activities.

Aon Hewitt a multinational HR firm inked a huge lease deal with Unitech for space measuring 800,000 square feet at its Infospace Tikri SEZ located at Gurgaon. By early next year, Aon Hewitt would be consolidating all four of its offices located at various locations within Gurgaon into this new one, enabling substantial cost savings as well.

Oriflame now occupies 40,000 square feet at Jasola located within the NCR. It relocated from Connaught Place.

In Bangalore:

As per real estate analysts, offices from Domlur and other office hubs are relocating to Bangalore’s Outer Ring Road.

For instance, moving from Domlur, 111,000 square feet of office space was recently leased by Inmobi in Bangalore’s ORR.

In Mumbai:

As per local brokers and real estate analysts, offices located in and around the expensive Worli area have been relocating to Andheri East.

For example, moving from more expensive Worli, Johnson & Johnson took up 150,000 square feet in Andheri East.