Track2Realty: The year 2012, which started on an unenthusiastic note due to the global as well domestic economic turmoil, is now showing initial signs of recovery. Amongst the larger world economies, the US economy recorded a GDP growth of 1.7% between April and June, slightly higher than earlier estimates of 1.5%.
Even though the European debt crises continue to prevail and remain the biggest concern for global economic recovery, the overall scenario seems to be improving. Similarly, on the domestic front, the Indian markets have witnessed an infusion of positive sentiments due to recently announced policy reforms such as allowing 51% FDI in multi-brand retail.
The country is expected to witness a reasonable GDP growth of 5% to 6% in 2012-13. These emerging positive indications are expected to stimulate real estate sector in the country.
The two primary sectors, IT/ITES and BFSI, form 70% of the total office space take-up. In 2013, IT/ITES is expected to grow at 13% and generate USD 110 billion in revenue.
The average per employee workstation space in IT/ITES sector is 80 sq ft. The sector is expected to require additional IT office space of 15.96 million sq ft to accommodate additional work force of approximately 0.2 million. The office space demand from the sector in 2013 is likely to increase by 34%. The average per employee workstation space in BFSI sector is 100 sq ft.
The sector is expected to require additional IT office space of 10.4 million sq ft to accommodate additional work force of approximately 0.1 million. The office space demand from the sector is likely to increase by 5% in 2013.
The total office space take-up in 2013 is expected to be circa 38 million sq ft, representing an increase of 21% y-o-y. This is a substantial increase as compared to the anticipated take-up in 2012, which is expected to witness a drop of 13% y-o-y.
The demand forecast has been generated by analyzing the historic growth rate and forecasted growth projections of the sectors, employment growth trend and per employee earnings. These parameters have exhibited a strong correlation coefficient with the office space take-up forecast for 2013.
