New Delhi: Office space absorption is likely to drop by over 20 per cent in the 2012 calendar year due to slowdown in economic growth and reduced outsourcing from the Europe, property consultant Jones Lang LaSalle said today.
The absorption is estimated at about 28 million sq ft in 2012 against 36.7 million sq ft during last year, it said.
"The outlook for office space absorption in 2012 is about 20 per cent lower than 2011 which witnessed take-up of about 36 million sq ft," Jone Lang LaSalle India Chairman and Country Head Anuj Puri told PTI on the sidelines of a realty conference organised by GIREM.
"This year, we expect to end the year with absorption level of about 28 million sq ft," he said.
Earlier, JLL had projected absorption of 32 million sq ft in this calendar year.
Puri attributed the fall in absorption largely to "drop in growth of Indian economy and shrinking of the outsourcing from Europe".
Noting that there is huge oversupply of office space, Puri said about 50 million sq ft of area would remain vacant by the end of this year.
On rentals outlook, he said it would remain stable despite oversupply situation as the developers could not operate below this level.
Puri observed that the office leasing activities would remain concentrated in the Tier I cities as currently there is no cost advantage to go into Tier II/III cities.
The expansion of Tier I cities like Delhi-NCR and Mumbai has helped in increasing the availability of office space in these locations to meet demand from corporates, he said.