BANGALORE: Office markets in India registered a downward trend in absorption in the first half of the year. The total net absorption across top eight cities in H1 2013 was noted at 10.9 mn sft, a decline of 15% compared to the same period last year, says Cushman & Wakefield in its latest report.
According to the report, slower economic growth led to the decline in expansion by companies as cautious sentiments continued since the beginning of the year.
“Even while absorption registered de-growth of 15% year on year, the second quarter of 2013 has outperformed on both accounts of year- on – year as well as quarter -on – quarter, indicating an existing strain of growth that is still visible amongst the corporate world,” says Sanjay Dutt, Executive Managing Director, South Asia, Cushman & Wakefield.
During H1 2013, Mumbai recorded the highest net absorption of 2.4 msf, which however was lower by 10% and Bangalore absorbed1.8 msft a decline of 22%. However, Bangalore and Pune recorded total absorption of 1.8 msf a decline of 22% and 1.7 msft respectively. Other markets like Kolkata saw total absorption dropped by 52%, NCR saw a decline of 42% followed by Ahmedabad at 21%.
However, Chennai and Pune recorded positive growth in net absorption in H1 2013 compared to same period last year by 6% and 37% respectively.
“By the end of the year office space absorption is expected to be at approximately 30 msf with markets such as Bangalore Pune and Mumbai leading the trend,” says Dutt.
Net absorption refers to the new leasing activity within the city and includes only the incremental new space take-up in instances of relocations and expansion from within the city. It does not include lease renewals and relocations to office spaces that have the same areas.