Can Office-Retail Complexes Make Their Presence Felt Among City Dwellers?
In the real estate sector, central business districts (CBDs) have traditionally caught home buyers' attention. With the growing demand of residential housing, developers started constructing projects in the peripheries of big cities. As the offices already started shifting to these peripheries or suburbs, the developers too began developing a centre, that offers a mix of office and retail channels, acquiring for itself the name, office-retail complexes or ORCs. As the offices, have expanded, companies have moved their businesses to larger areas in the CBDs, which is ultimately nearing saturation point, the enhancement of office spaces with the concept office-retail complexes are soon to rise.
Design and incorporation
For city dwellers, recreation sections like cafes, pubs, fine dining, as well as BFSI and ATMs — are highly desirable within the proximity of office spaces. The conjunction meets the needs of office goers. Retail and commercial segments are balancing and are expected to bring in progress as well as appreciation at the same time.
They are being designed with two or more entrances with dedicated sections for retail customers and employees to ensure there is no working at cross-purposes. The division floors are detailed with undertaking the fact of gaining profit for each of the segments. Retail outlets would occupy the first two floors, while the top floors would be for offices.
The ORCs act as a hedge tool for the real estate developer community to keep a variance pricing for retail and office spaces. Retail players are assured of footfalls as they tap into the catchment areas, a big portion of which include employees working in the same office space.
In the past two decades, there are several new business districts (BDs) emerging in Tier I cities. This trend started flourishing when the cities began expanding rapidly and their conventional central business districts had either become saturated or did not serve the high needs of corporate occupiers. Though the Tier II cities are yet to evolve completely under the trend of ORCs, the concept is mushrooming in other cities as well, given its relevance and the immense benefits it offers to retailers and companies. As India increasingly assimilates into the global economy and the number of city dwellers living in Delhi-NCR, Mumbai and Bengaluru increase, a business district remains incomplete without certain retail segments.
If transitions occur the way they are now, then residential spaces will also be a part of this convergence. The real estate developers and realtors are coming up with such a trend to tailor and cater to the needs of workplaces and recreation centres.
Which areas are trending in ORCs
The two key regions, which have become the de-facto central business districts in Mumbai and NCR are the – Bandra-Kurla Complex and Gurgaon. Both the places are attracting retail. Apart from fashion and entertainment zones, food and beverages (F&B) is the most central category here accounting for 46% of the total retail categories' presence. At Bandra Kurla, expensive fine dining restaurants have left their impact while at Andheri East most F&B outlets cater to moderately priced, but fine dining.
Gurgaon is the showstopper in NCR followed by Noida. Gurgaon outshines all others in terms of size of the ORC retail format and the tenant mix. This place has very well understood and taken hold of how to attract city dwellers by offering good mix of offices and retail outlets. The main category here includes a diverse mix of groceries, medical stores, property brokers/builders, laundry, courier services, jewellery stores, printing services and stationary outlets. Banking, financial services and insurance (BFSI) makes up for the next highest tenant presence, closely followed by F&B.
Bangalore, plays an extremely exceptional role in the ORCs. This city's ORCs flourish in the CBD, making it the only city with such an exclusive trend. ORCs in Bangalore are a part of the shopping centre of the city, rather than a standalone office district. Taking up space in commercial office buildings in the city centre itself makes business sense for retailers, as they not only cater to the shoppers, but also make big rental savings by opting for ORC formats over the high streets. F&B follows a close second as this category has maximum traction, both with shoppers and office goers.
In Hyderabad, there are multi-tenants in an office complex. They were quite popular in the city even before the Hyderabad information technology and engineering consultancy city or Hitec City, which has clusters of office hubs, came into being. Developers are also offering custom-build projects. There are ORC projects like The Platina from Gowra Ventures in Hyderabad. It has retail and office space, a business class hotel, 11 floors with four levels of parking and built up space of one million sq ft. In addition, it is a green building.
The trend is catching on fast
There are multiple projects opting for the ORC route. This is partly because most of the office space by grade A developers is saturated or will be occupied completely in a short time. Food and beverages segment occupies the maximum space in ORCs. Because of the good tenant mix, many developers want to try their hand in developing ORCs instead of being restricted to office spaces.
If the companies started increasing their headcounts in the days to come, then it will also act as a spur in demand for ORCs. With the improving employment condition and companies offering more job prospects, it is predictable that it will have a trickle-down impact on residential demand as well. If this turns out to be true, there will be a considerable floating population leading to increased demand.
Mixed-use development is a case-specific model. These can be used in IT and business hubs, which have an influx of working population. The same is not possible in metros and standalone commercial towers, where space is a constraint. The pause in office space demand for last few years gave rise to such a trend which is catching on fast. Office spaces at strategic locations with developers offering great township projects near to the ORCs, which offers great connectivity and accessibility.