Even as the real estate sector shows mild signs of recovery, one area not showing any indication of bouncing back is the commercial space segment.

Real estate agents and developers agree that the segment is facing excess supply with over 30 lakh sq-ft ready but vacant. Some say that if commercial projects stalled due to lack of demand are also taken into account, the vacant commercial space could run into 60 lakh sq-ft.

“We are faced with a situation where large tracts of commercial space within malls across the city — in Viman Nagar, Nagar Road, Solapur Road, Koregaon Park, Kalyani Nagar, Baner, Deccan, NIBM Road, Camp — are vacant,” said Ravi Varma, president of the Estate Agents Association of Pune.

One of the main reasons, according to Varma, is that many developers went ahead with construction of malls without a market survey. “People expected malls to be a huge success here, so every other developer decided to build one,” Varma said. “Four years back, a survey in Gurgaon concluded that every family would have to spend over Rs 1.6 lakh per year for malls to break even or be a success. Will Puneites be able to spend that much?”

Another factor that has hit commercial space segment is lack of activity on the IT front. “At least 30-33 lakh sq ft of commercial space is vacant in Pune. Majority of this space was supposed to be occupied by IT companies. Because of the slowdown, few IT companies set up base in the city over the last one-and-a-half years,” said Rohit Gera, joint MD of Gera developments and secretary, Promoters and Builders Association of Pune. “No one expected the slowdown in the US. However, we expect these commercial spaces to be occupied soon,” he said.

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