BANGALORE: Bangalore office market is expected to absorb around 8 million sq ft by end-2013 followed by revival in demand from IT/ITeS sector.
"Bangalore saw 118 per cent Upsurge in absorption in Q2 2013 over Q1 2013. However there is a drop of 28 per cent as compared to Q2 of 2012. Majority of the demand came from IT/ITes segment. Consolidation of office spaces by most large sized companies will continue to be the norm," says Samantak Das, chief economist and director - research Knight Frank. Whitefield, Sarjapur Road ORR, Marathalli ORR remains the favourite destination for corporate to rent office spaces.
Figures provided by property consultants-Knight Frank-shows that Bangalore commercial space absorption was recorded 105 million sft till date as compared to other top Indian cities followed by growth in leasing from IT/ITes firm. Additionally NCR and Mumbai recorded 115 million sft and 99 million sft till date.
The city also saw vacancy level drop to 13 per cent in the second of 2013. "Absorption levels have been trending down since 2011, however limited supply has kept vacancy levels in check. Additional 7.5 mn.sq.ft is expected to enter market in 2014," says Das. Commercial space vacancy level across cities like Mumbai, NCR, Bangalore and Pune is expected to drop to 17 per cent by the end of 2017 as compared to 20 per cent 490.3 million sft in 2013.
In contrast, Bangalore's residential market has seen absorption levels increasing in recent years unlike other frontline cities like Mumbai and NCR. Property absorption level has increase 22 per cent in the first half of 2013 mainly driven by homes in the mid income group.
According to the report around 28,000 units were launched during H1 2013,w with 53 per cent of the units launched were priced under Rs 50 lakh. Around 22,000 units were absorbed during H1 2013, a jump of 22 per cent over same period last year. Average price appreciation of 8-13 per cent was recorded in Q2 2013 over the prices in Q2 2012.
"We expect to double our sale in coming months. Southern market is resilient as compared to other geographies like in Mumbai and NCR,as property cost is still affordable here. We have also not seen substantial increase in prices in South," says Jackbastian Nazareth group CEO Puravankara Projects. The company plans to launch approximately 10.87 million square feet this fiscal across South.
Agreeing with the same MaheshPrabhu, director -- finance, Century Real Estate says that project that are competitively priced are selling faster. "Sub Rs 50 lakh product in good location is selling faster . We are seeing stable sale and has priced high end properties at Rs 6500-7500 per sft with an idea is to liquidate it faster in the market," he says.