Prestige Group seek to revamp the office portfolio in 5-7 years

Just weeks after Prestige Group and Blackstone Group Inc. seal the deal over commercial assets worth $ 1.5 million, Prestige Group reveals the plan to revamp their office portfolio. The move comes after the South Indian realty giant got a breather thanks to the deal that helped them ease their debt. A certain amount of the funds received was mentioned to be allocated towards future investments that will aid the company in replacing old assets with new ones.

After selling 21 million sq. ft, Prestige Group now intends to build a total area of office space exceeding 40 million sq. ft. across multiple cities. An interview of the company’s CEO; Juggy Marwaha revealed in his exact words, “We are gearing up to rebuild our office portfolio over the next 5-7 years, which will be a mix of both stand-alone buildings (400,000-500,000 sq. ft) and office parks. This will be Prestige’s 2.0 version, wherein a post-pandemic world, new-age office buildings will be designed differently. We believe asset management and technology will play more significant roles."

Prestige enjoyed success in only the south zone but is now ready to venture beyond South India and plans to enter the property markets in Mumbai, Pune and Delhi for its 2.0 plan. The Bangalore based realty giant plans to erect projects of 7.5 million sq. ft. in Mumbai, 4.5 million sq. ft. in Hyderabad, 1 million sq. ft. in Pune, 750,000 sq. ft. in Delhi’s Aerocity, apart from the 27-30 million sq. ft. of projects in Bangalore.

The aggressive yet strategic plan for Prestige’s future is put forth with careful consideration over the standstill of commercial office sector after a 7-year bull run due to the COVID-19 pandemic and its consequences for the future of commercial office space. Many multinational companies seem to be considering a hybrid work method due to the uncertainty of when can people resume operating from offices at full capacity. Some companies are even considering this hybrid method of work-style for the future irrespective of the pandemic. Since the projects are estimated to be completed by the end of 2022, the market speculation seems to be on the brighter side for the real estate industry.

Other than the properties agreed to be sold, Prestige currently has 1 property in Kochi and 3 in Bangalore that is under construction and will be taken over by Blackstone after completion. They are currently being developed as joint projects. Although the office space market seems dull due to all the vacancies brought on by the pandemic, Prestige Group says they are being assured by their clients over the future demand of office space which is estimated to be around 7-8 million sq. ft. in Bangalore alone.

According to Night Frank Research, Office leasing activity in Bangalore in H2 2020 was observed to be the highest among the top 8 cities with an impressive 8% year on year growth amidst the COVID-19 pandemic and its lockdown/work from home situations. The city witnessed total leasing of 12.32 million sq. ft. by the end of 2020.

Prestige Group has some projects on the table namely; Prestige Smart City, Prestige Primrose Hills, Prestige Finsbury Park, Prestige Waterford, Prestige Ocean Crest etc.