New completions in Pune’s commercial realty market witness big jump in 2021, absorptions also increase

[ecis2016.org] Net absorption in Pune’s office market increases by 24% in 2021, while new completions have jumped by 90%

The commercial property market in Pune remained quite buoyant in 2021. While net absorption was well-spread over all the four quarters of 2021, new completions were mostly concentrated in the first and fourth quarters. There were some big leasing deals signed despite the pandemic and 2022 has started on a positive note for the office real estate market in Pune.

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The net absorption in Pune’s office market increased by nearly 24% in 2021 at 3.1 million sq ft (msf) against 2.5 msf in 2020. New completions in Pune’s commercial property market jumped about 90% in 2021 at 4 msf compared to 2.2 msf seen in 2020, according to a report by JLL India. The year 2022 has started on a positive note and the rest of the year seems to be promising, as a majority of the population gets vaccinated and work-from-office expected to resume in 2022.

Source: JLL India

While work-from-home continued in 2021, the vacancy levels in Pune dropped to an average of 4.75% during 2021 compared to an average of 4.87% in 2020. The average rent across all the months of 2021 in Pune’s commercial properties remained almost the same in 2021 at Rs 75.3 per sq ft per month compared to an average of Rs 75 per sq ft per month in 2020, according to a report by JLL India.

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Pune’s commercial space micro markets

The secondary business district (SBD) and Hinjewadi micro markets saw some hectic activity, as far as the commercial property market in Pune is concerned in 2021. Baner and Kharadi in SBD were particularly active. The major occupiers in Pune in 2021 were the manufacturing and industrial sectors, which went on expanding their footprints in the city. New supplies are also scheduled in SBD and Hinjewadi areas, according to a report by JLL India. There were some decent leasing deals signed by large companies in Q4 of 2021 as they expect their employees to return to offices after getting fully vaccinated. The corporates remained hopeful of starting full-fledged operations from offices in 2022.

Scheduled completions in Pune’s commercial property market

There are various major commercial buildings being constructed and are scheduled to be completed in 2022 like ‘Blue Ridge Phase 3’ in Nalanda Suburbs, having a gross leasable area of 1.4 msf and ‘Bluegrass Business Park-Tower A’ in SBD having a gross leasable area of 0.91 msf.

There are some major buildings scheduled to be completed in 2023 like ‘Panchshil Business Park’ in SBD having a gross leasable area of 0.9 msf and ‘ITPP Building 1’ in SBD having a gross leasable area of 1.4 msf. These four buildings will provide further vivacity to the Grade A building office property market in Pune, according to a report by JLL India. Many old real estate companies and some international players in Pune are now competing to woo corporate clients.

Warehousing and logistics property market in Pune

Pune witnessed net absorption of 1.9 msf of warehousing and logistics space and 2.8 msf of new supply in 2021, according to a report by CBRE.

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3PL sector accounted for 34% of the net absorptions in 2021, followed by the e-commerce industry at 21% and the manufacturing sector at 15% in 2021, according to the CBRE report.

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The prominent deal in Pune’s warehousing and logistics space market was of Haier absorbing 1.4 lakh sq ft on rent in ‘Indospace Warehouse’ located along Sanaswadi-Ranjangaon industrial belt in Pune. Another major deal was of DealShare taking up 1.2 lakh sq ft space in ‘Vijay Logistics’ located in the Chakan-Talegaon belt in Pune. Another deal was signed by MAN Truck and Bus taking up 1.2 lakh sq ft space in ‘Vijay Logistics’ located in the Chakan-Talegaon belt of the city, said a report by CBRE. The warehousing market is expected to do well in the next few quarters in Pune. Manufacturing and retail industries are expected to take up large spaces in 2022. There are significant warehousing spaces coming up in the Sanaswadi-Ranjangaon industrial belt of Pune.

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