Rent for commercial start-ups spaces sees 10% rise because of high demand

There was a time when start-ups were considered to be risky. However, the success of start-ups in the recent past has led to an incessant rise in the popularity of start-ups. However, the shortage of spaces in coming-of-age cities has always been a problem, to solve which, there was a need of micro markets.

And now, the growing demand for commercial space from start-ups in India has led to a 10% increase in the rentals of the hubs for these companies, as per the real estate services firm CBRE.

"The cities that led the demand include Bengaluru and Gurgaon. By 2020, there will be 11,500 startups, employing over 250,000 people," Ram Chandnani, managing director-transaction services at CBRE South Asia, told ET.

Out of the total demand for office market, nearly 10% is driven by ecommerce companies, which barely existed about two years ago. However, in 2015, these companies leased 4.3 million sq ft as compared to 0.54 million sq ft in 2014, said CBRE data.

"At a time when quality supply is drying up in the market, the additional demand coming in from e-commerce has surely had a positive effect on the rental values of key ecommerce favourite micro markets like Mumbai's Eastern Suburbs, Whitefield in Bengaluru and NH8 in Gurgaon," Ramesh Nair, COO, business and international director at JLL India, told ET.

The demand from e-commerce is generally directed towards quality Grade A spaces that provide large floor plates in the peripheral business districts of various cities. These cities include Mumbai, Delhi-NCR, Bengaluru, Chennai and Hyderabad.

"We have been seeing active interest from e-commerce companies, which are now an important segment of our overall portfolio. It is a small but interesting new area and we have been looking at different solutions to respond to this segment," Mike Holland, CEO of Embassy Office Parks, a JV between Embassy Group and Blackstone, told ET.

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