Mumbai: According to a study, Bengaluru accounted for 49 per cent of India’s office space absorption in 2014. The city absorbed 13.77 million square feet of office properties in the past year.
In terms of rental increase, Bengaluru has marched ahead of other cities with two locations such as outer ring road (north) and central business district (CBD) in Bengaluru registereing an increase of 28 per cent and 22 per cent increase during 2014, said the latest report by Colliers International. IT/ITES accounted for 73 per cent of Bengaluru’s total absorption.
“Over and above this, approximately, 4.38 million sq ft of office space has been pre-committed in various IT parks that are under construction. Outer Ring Road outshined other micro-markets as the most preferred micromarket with more than 51per cent of the total absorption, followed by Whitefield 20 per cent and the CBD 6 per cent," said Colliers.
Despite a revival in demand in Mumbai, the total office spacce absorption of 3.12 million sq ft in 2014 was 44 per cent lower than the 5.6 million sq ft absorption witnessed in 2013, it added.
Colliers said the average deal size in Mumbai declined significantly this year and approximately 60 per cent of the transactions fell in the range of 5,000 to 20,000 sq ft. "The primary reason for this decline is limited participation of cost-conscious IT/ITeS companies and cautious occupier sentiment in view of the economic slowdown witnessed in the previous years," Colliers said.
Interestingly, Navi Mumbai saw 22 per cent jump in rents in 2014. Gurgaon recorded leasing volumes of 4.73 million sq ft in 2014, which is approximately 13 per cent less than the previous year’s absorption of 5.47 million sq ft.