Leasing of prime office space across key cities in India witnessed an increase in the second quarter of 2012 with over 7 million sq.ft. of office space being absorbed across key cities.
According to the findings of CBRE’s latest report, India Office Market View Q2, 2012, The NCR, Mumbai and Bangalore accounted for over 75% of the entire space absorbed in the country.
This is an encouraging number when compared to the space take up recorded in Q1, 2012 which stood at approximately 5.4 million sq.ft. The India office Market View is a quarterly report which provides a summary of prime office rents across key cities in India.
Supply continued to overtake demand in the second quarter of 2012, with more than 9 million sq ft of office space being added across the leading cities of the country. The new supply was largely concentrated in NCR, Bangalore and Mumbai, comprising almost 96% of the entire quantum added in the present quarter.
Most of the supply added comprised developments that were delayed for the past several quarters, especially in Mumbai. Other cities such as Chennai, Pune and Hyderabad experienced delays in project completions and a rationalisation of the supply pipeline.
Commenting on the findings of the report, Anshuman Magazine, Chairman and Managing Director of CBRE, South Asia Pvt. Ltd said “After the initial sluggishness witnessed in the market in Q1, 2012, the rise in absorption of office space across key markets is good news for the real estate sector in the country. However given the current economic scenario, coupled with a slowdown in large space requirements from big global companies, overall, the office market may witness a drop in absorption this year. The demand – supply gap continues to pressurise values across most micro-markets and could have negative implications on the rental growth. Improvement in the current situation will depend on the global economic environment and the government policies in India.”
