MUMBAI: The overall office space absorption in the top seven cities of the country grew by approximately 35 per cent in fourth quarter of this fiscal at nearly 8.2 million sq ft against six million sq ft in the previous quarter, according to real estate consultancy CBRE’s latest report.
Few big ticket transactions in IT, pharma and banking services in leading cities combined with completion of several pending large commercial and SEZ developments in this quarter contributed an additional 7.3 million sq ft to the existing office space stock across India’s leading cities and helped improve absorption, the report said.
Pune-led project completions, followed by Bangalore and Hyderabad, contributing to about 71 per cent of the total supply addition in the last quarter of 2013. The total office space addition by end-2013 stood at approximately 31 million sq ft.
According to the report, prevalent vacancy levels and subdued demand had mainly contributed to project delays in the previous two quarters and impacted absorption levels.
Including the fourth quarter office space absorption of 8.2 million sq ft, the total office space absorption for the entire year has seen an increase of over nine per cent on a year-on-year basis at about 28 million sq ft.
Anshuman Magazine, Chairman and Managing Director, CBRE South Asia, said, “While the market remained focused on mostly small- and medium-sized transactions, there were a few big ticket transactions in sectors such as IT, pharmaceuticals and banking services in leading cities, such as Gurgaon, Bangalore, Hyderabad and Pune.”
“Going forward, demand is most likely to be concentrated in peripheral micro-markets of India’s leading cities, owing to the abundant availability of cost-effective office space options. Occupiers belonging to the IT/ITeS, banking, financial services and pharmaceutical sectors are likely to drive the demand for office space and contribute significantly to overall office space absorption levels,” he added.