Office space absorption dipped by 23% during 2012 in major cities to 29 million sq ft as corporates remained cautious of expanding businesses amid global uncertainties and slowdown in the Indian economy, property consultant Cushman and Wakefield has said.
The total net absorption for 2012 was recorded at 29.05 million sq ft in the eight major cities — NCR, Mumbai, Bengaluru, Chennai, Hyderabad, Pune, Kolkata and Ahmedabad — against 37.73 million sq ft in the previous year. The supply of office space also dropped by 10% at 35.30 million sq ft against 39.35 million sq ft in 2011.
“The cautious approach by global and Indian companies, in view of a slower economic growth led to a decline in absorption levels,” the consultant said, adding that majority of the companies put on hold their expansion plans. Chennai saw the highest decline — down 51% over last year. Bengaluru, a traditionally high absorption market recorded a decline of 24% over last year.
“Almost all locations which are driven by the IT/ ITeS and related industries recorded a slowdown in absorption,” C&W said.