Electronic City Among Most Favourable In Cost-Effective Rental Segment: Savills India

With average rentals less than one dollar throughout the last decade, Electronic City continues to be an affordable choice for cost-conscious occupiers operating on a ‘$1 real estate cost strategy’. With average rentals being within a dollar, this micro-market offers cost-effective rental arbitrage over key localities such as Koramangala, Outer Ring Road (ORR), Whitefield and Hebbal- according to the latest report titled – Dollar-Edge Rental Office Markets in India, by Savills India, a global property consultancy firm.
The rental price in premium office buildings is one key parameter which has a positive co-relation with the overall affordability of the market. Electronic City has remained an office market with average rentals within one dollar throughout the last decade and continues to remain so, while other key localities such as Koramangala, Whitefield, ORR and Hebbal no longer offer the cost arbitrage advantage.
Post-the pandemic-induced slowdown, the leasing activity is expected to pick up from the momentum evident in last quarter of 2021 and rebound visibly in 2022 and 2023. In fact, the micro-market registered around 0.2 mn sq.ft. of gross absorption in the first quarter of 2022. Electronic City is likely to witness cumulative space take up to the tune of 2-4 mn sq.ft in the next 5 years. The market currently offers high quality office space of 8.7 mn sq.ft, with an estimated supply addition of 2.5 mn sq.ft in the next 3 years. Average rentals, meanwhile, are expected to remain rangebound in the near future.