Office space absorption rose by 46 per cent during April-June period at over 10.2 million sq ft in the country's seven major cities over the previous quarter, according to property consultant CBRE.
Office space absorption rose by 46 per cent during April-June period at over 10.2 million sq ft in the country’s seven major cities over the previous quarter, according to property consultant CBRE.
“Over 10.2 million sq ft of office space was absorbed during April to June quarter of the year. This is a quarter- on-quarter growth of approximately 46 per cent, primarily led by Delhi National Capital Region (NCR) and Bangalore, which accounted for almost 50 per cent of the total space take-up,” CBRE said in a report ‘India Office MarketView – Q2 2016’.
On the supply front, nearly 7 million sq ft of fresh office space came into the market during this period.
Hyderabad and Mumbai together led supply addition, accounting for more than 65 per cent of the total supply of fresh office space across leading cities during the quarter.
“More than 17 million sq ft of corporate real estate was absorbed across the leading cities in H1 2016, translating to a marginal rise of 6 per cent over that of H1 2015 when absorption stood at over 16 million sq ft,” CBRE said.
Commenting on the report, CBRE South Asia Chairman and Managing Director Anshuman Magazine said: “Despite a muted global economy, India continues to be a favoured outsourcing destination for corporate firms.”
“Recent policy announcements by the Government and a stable domestic economy are all expected to attract investments into the country’s real estate sector and enable the ease of doing business here,” he added.
IT/ITeS continued to be the largest demand driver for office space, recording over 50 per cent of the total leasing activity recorded in the quarter.
This was followed by engineering and manufacturing firms and the BFSI sector. The e-commerce segment also saw a slight uptick in office space take-up of about 5 per cent over 4 per cent in Q1, 2016.
“The markets of NCR, Mumbai and Bangalore continue to lead the demand for corporate office space. Similar to the trend in previous quarters, occupier focus is likely to be concentrated towards prime micro-markets of leading cities,” CBRE Managing Director – Advisory and Transaction Services Ram Chandnani said.
Except for Delhi NCR, Mumbai and Hyderabad, the Central Business Districts (CBDs) of Bangalore, Chennai and Pune saw a rental rise of about 2-6 per cent q-o-q. On the other hand, Kolkata CBD witnessed a 4-6 per cent q-o-q rise in rentals.