Office space absorption across key metro cities in the country in the first half of 2012 saw a decline of 21% at 13.4 million sqft as compared to the same period a year ago,when 16.9 million sqft was absorbed.
The latest office market report from real estate consultancy firm Cushman & Wakefield says that while Bangalore witnessed the highest absorption of office space in the first six months,of 3.01 million sqft,the city registered a 46% decline in absorption over the same period last year.Chennai reported a 12% decline in absorption.
This slowdown in demand is due to the cautious expansion plans of the IT/ ITeS sector as majority of demand in these cities is driven by the sector, said the report.
Sanjay Dutt,executive MD,South Asia,Cushman & Wakefield,said,The demand from the IT/ITeS sector is likely to remain subdued resulting in low leasing activity.
The National Capital Region saw the highest decline in office space absorption of 53%,but Mumbai and Hyderabad bucked the trend,registering 19% and 5% increases in absorption respectively.
The decline in office space leasing is indicative of a cautious approach from the occupiers,given the downward revision on the GDP outlook for the year, said Dutt.He added,There was some pent up demand from sectors such as BFSI which was absorbed,especially after a revision in RBI policies that where welcomed by certain domestic sectors.
Despite registering a fall in the absorption rate,Bangalore witnessed the highest addition of office space supply of over 4.1 million sqft in the first six months of 2012.
The report said that absorption in Bangalore was concentrated in the peripheral locations of the city such as Outer Ring Road,resulting in appreciation of rents of up to 10% in these areas.Bangalore is expected to be one of the most volatile office markets in 2012 given the rapid economic changes in India as well as across the world, said Dutt.
PROBLEM OF PLENTY
The slowdown in demand is due to the cautious expansion plans of the IT/ITeS sector Bangalore witnessed the highest addition of office space supply of over 4.1 million sqft in the first six months of 2012 Office space absorption in Bangalore was concentrated in the peripheral locations of the city such as Outer Ring Road
The latest office market report from real estate consultancy firm Cushman & Wakefield says that while Bangalore witnessed the highest absorption of office space in the first six months,of 3.01 million sqft,the city registered a 46% decline in absorption over the same period last year.Chennai reported a 12% decline in absorption.
This slowdown in demand is due to the cautious expansion plans of the IT/ ITeS sector as majority of demand in these cities is driven by the sector, said the report.
Sanjay Dutt,executive MD,South Asia,Cushman & Wakefield,said,The demand from the IT/ITeS sector is likely to remain subdued resulting in low leasing activity.
The National Capital Region saw the highest decline in office space absorption of 53%,but Mumbai and Hyderabad bucked the trend,registering 19% and 5% increases in absorption respectively.
The decline in office space leasing is indicative of a cautious approach from the occupiers,given the downward revision on the GDP outlook for the year, said Dutt.He added,There was some pent up demand from sectors such as BFSI which was absorbed,especially after a revision in RBI policies that where welcomed by certain domestic sectors.
Despite registering a fall in the absorption rate,Bangalore witnessed the highest addition of office space supply of over 4.1 million sqft in the first six months of 2012.
The report said that absorption in Bangalore was concentrated in the peripheral locations of the city such as Outer Ring Road,resulting in appreciation of rents of up to 10% in these areas.Bangalore is expected to be one of the most volatile office markets in 2012 given the rapid economic changes in India as well as across the world, said Dutt.
PROBLEM OF PLENTY
The slowdown in demand is due to the cautious expansion plans of the IT/ITeS sector Bangalore witnessed the highest addition of office space supply of over 4.1 million sqft in the first six months of 2012 Office space absorption in Bangalore was concentrated in the peripheral locations of the city such as Outer Ring Road
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