The demand for office space in the country remained subdued because of a cautious sentiment amongst occupiers. The total take up of office space in the April-June 2012 quarter was 5.9 million sq ft, a decrease of 21% q-o-q and 47% y-o-y, according to a recent report by property advisory firm DTZ.
The city of Bangalore saw the highest amount of space take up at 1.8 million sq ft. Mumbai saw a sharp fall of 68% in take up.
“The IT/ITES and BFSI sectors continued to drive leasing activity across the seven markets, but at a much lower level than seen in previous quarter. Occupiers generally remain cautious and the number of pre-leases declined considerably over the quarter. An increase in activity is expected, once more clarity emerges regarding the direction of the economy,” said the report.
The total stock of grade A office space in the seven main Indian cities stands at 379 million sq ft at the end of June 2012 as compared to 376 million sq ft in previous quarter.
The demand for office space in Delhi-NCR strengthened in the quarter with a total of 1.67 million sq ft, an increase of 92% q-o-q. “Demand in the NCR was primarily driven by the traditional IT/ITES sector followed by consulting and manufacturing companies,” said the report.
The peripheral business district of Gurgaon saw a 261% increase in take up of space and Noida witnessed the sharpest fall by 83% q-o-q. The central business district saw a slight increase in the availability ratio as companies moved to cheaper locations in Gurgoan and Noida.
The April-June quarter saw an overall reduction of 28% in new supply coming into the NCR market. Only 0.71 million sq ft of completed space was added to the market. “The drop was primarily due to the fact that developers delayed the delivery of projects owing to rising input costs and a liquidity crunch on account of high lending rates,” said the report.
The city of Bangalore saw the highest amount of space take up at 1.8 million sq ft. Mumbai saw a sharp fall of 68% in take up.
“The IT/ITES and BFSI sectors continued to drive leasing activity across the seven markets, but at a much lower level than seen in previous quarter. Occupiers generally remain cautious and the number of pre-leases declined considerably over the quarter. An increase in activity is expected, once more clarity emerges regarding the direction of the economy,” said the report.
The total stock of grade A office space in the seven main Indian cities stands at 379 million sq ft at the end of June 2012 as compared to 376 million sq ft in previous quarter.
The demand for office space in Delhi-NCR strengthened in the quarter with a total of 1.67 million sq ft, an increase of 92% q-o-q. “Demand in the NCR was primarily driven by the traditional IT/ITES sector followed by consulting and manufacturing companies,” said the report.
The peripheral business district of Gurgaon saw a 261% increase in take up of space and Noida witnessed the sharpest fall by 83% q-o-q. The central business district saw a slight increase in the availability ratio as companies moved to cheaper locations in Gurgoan and Noida.
The April-June quarter saw an overall reduction of 28% in new supply coming into the NCR market. Only 0.71 million sq ft of completed space was added to the market. “The drop was primarily due to the fact that developers delayed the delivery of projects owing to rising input costs and a liquidity crunch on account of high lending rates,” said the report.
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