The first half of 2012 recorded total absorption of approximately 13.4 million sq ft of office space in India registering a decline of 21 percent compared to same period last year which was 16.9 million sq ft.
Bangalore witnessed the highest absorption in first half of 2012 at 3.01 million sq ft followed by Mumbai with 2.78 million sq.ft, according to the latest office market report from real estate consultancy Cushman & Wakefield.
NCR on the other hand saw the highest decline of 53 percent in absorption in the first half of the year compared to same period last year. It recorded absorption of 1.35 million sq.ft vis-a-vis 2.9 msf in 1H 2011.
Bangalore also saw a significant slowdown of nearly 46 percent over 1H last year even though it registered the highest quantum of absorption, while Chennai recorded a slowdown of 12 percent. This slowdown in demand is due to cautious expansion plans from IT/ITeS sector as majority of demand in these cities is driven by the sector.
However, Mumbai (19 percent) and Hyderabad (five percent) bucked the trend and showed an increase in absorption compared to the same period last year.
Total office space supply registered in 1H 2012 was 16.2 million sq ft, reduced by eight percent over the same period last year. Bangalore witnessed the highest addition of office space supply which was over 4.1 million sq ft followed by Mumbai which witnessed 3.6 million sq ft.
Sanjay Dutt, Executive Managing Director, South Asia Cushman & Wakefield, said “The first half of the year has seen decline in office space leasing which is indicative of a cautious approach from the occupiers given the downward revision on the GDP outlook for the year.”
“However, there were some pent up demand from sectors such as BFSI which were absorbed, especially after a revision in RBI policies that were welcomed by certain domestic sectors.”
