Pegs Vizag office space @ 2 million sq. ft & Avg. capital residential value of flat @ Rs 4,950 per sq. ft.

Global residential and commercial real estate services company, JLL has identified the slew of upcoming infrastructure projects in and around Vizag to be the drivers of growth in the real estate space in the city.

Speaking at the CII Visakhapatnam Conclave on economic growth drivers & real estate Development, Mr Jerry Kingsley, Head, Strategic Consulting, Value & Risk Advisory India, City Lead Capital Markets – Chennai, JLL India cited the various road development projects in and around the city coupled with other key modernisation projects to notch up real estate demand in this region.

‘The upcoming Vizag-Raipur greenfield expressway, 6-lane Visakhapatnam Bhogapuram Beach Corridor, Vizag-Chennai industrial corridor, Anandapuram-Pendurthy, Bhogapuram international airport, modernisation of the Vizag railway station and port connectivity are all factors that are going to significantly contribute to the growth of the real estate sector in this region’ said Mr Jerry.

The firm also released an outlook report on Visakhapatnam’s real estate wherein it highlighted the 3 I’s of Vizag i.e. Infra, Industry and Investment.

Vizag’s Commercial Space

Commenting on Vizag’s commercial office Mr Jerry informed that the city of destiny has limited Grade A office stock of 2.2 million sq. ft. and most of this stock is concentrated in Madhurawada & Rushikonda IT SEZ noted the report. 

The report cited lease rentals (on chargeable area basis) in Prime office market to be in the range of Rs 50 – 55 per sq. ft. per month, followed by PBD North i.e., Rushikonda & Madhurawada with Rs 40 – 50 per sq. ft. per month.

Retail Space

Similarly for high end retail brands the report pegged high street ground floor rentals i.e. INR per sq ft per month to be ranging from Rs 80 to Rs 250 depending on the location (See Table). 

Residential 

The report cited average capital value of residential apartment in the city to be INR 4,950 per sq. ft.

India on a whole

Speaking on the overall Indian office market Mr Jerry highlighted that India is the bright spot in a rather gloomy and lacklustre scenario abroad.

“India’s office market space is ready to take off in a big way. The Indian office realty space is currently estimated to be around 750 million sq. ft and is forecasted to grow in size to 1 billion sq. ft by 2025. 

We will therefore be the largest office market in Asia much bigger than Australia, Japan, China” opined Mr Jerry. This he said will lead to creation of about 1.5 million jobs.

Elaborating on some of the numbers he said that the office space demand pre-covid i.e. in 2019 was 48 million sq. ft which fell to 20 million sq. ft amid to the pandemic in 2020 and then rose to 25 million sq. ft in 2021 and was 38 million sq. ft in 2022.

‘On an average 35-40 million sq. ft of office space is consumed in India of which Bengaluru, Mumbai and NCR combined gobble up 20-25%, followed by Pune and Chennai 10-15%’ said the JLL representative and added that 57 million sq. ft of additional office space going to come up in 2023.

Speaking on the residential space Mr Jerry said that about 2 lakh units are sold every year and that the housing demand for houses in the Rs 1.5 crs range has gone up from 9000 units to 15000 units.

Warehousing

In terms of warehousing he informed that 40 million sq ft of warehousing space is transacted every year.