IT hub Bangalore is expected to witness the second highest demand for office space in the Asia Pacific region during 2014 in a list topped by Tokyo, according to property consultant Cushman and Wakefield (C&W).
"Bangalore is expected to see the second highest absorption in the APAC region and the highest demand in the country owing to expansion of the IT, ITeS and multi-national companies," C&W said in a statement.
Tokyo is forecast to see the highest office absorption among the 30 cities in Asia in 2014 at 7.6 million sq ft, followed by Bangalore at 2nd position and Manila at 3rd, with expected absorption of 6.3 million sq ft and 6 million sq ft, respectively, during 2014.
"The office demand is likely to reach 60 million sq ft in all 30 major cities tracked within Asia Pacific," C&W said.
The National Capital Region (NCR) is projected to witness the sixth highest net absorption of offices space in the region, at 3.7 million sq ft representing a rise of approximately 10 per cent over 2013.
"The demand for commercial office space will strengthen going forward in 2014 and 2015. The oversupply situation, which most cities across the country are witnessing, will ease from 2014 onwards as economic conditions improve domestically and globally," C&W Executive Managing Director, South Asia, Sanjay Dutt said.
He said that the growth of IT/ITeS sector has been greatly affected by the global economic scenario.
"With a more favourable dollar to rupee exchange rate and the improvement in global economic scenario, we expect the industry to benefit in terms of increase in exports of IT services from India," Dutt said.
An expected improvement in overall economic condition in the second half of 2014 would result in companies undertaking more expansion activities, which will propel the demand for office space.
Net absorption is likely to increase by 31 per cent over 2013 at 29.5 million sq ft. The cities to record majority of the net absorption will be similar to 2013, with Bangalore, Mumbai, Delhi NCR and Pune leading the pack.
There is increased interest by private equity players for projects with strong fundamentals and Bangalore remains a bright spot in India for foreign investors as indicated by the trends from last 2 years.