Office space absorption rose 46 per cent to over 10.2 million sq ft in the second quarter of 2016 on improved demand from corporates, according to property consultant CBRE. National Capital Region (Delhi, Gurgaon and Noida) and Bengaluru accounted for almost 50 per cent of the total space take-up in April-June quarter.
“Despite a muted global economy, India continues to be a favoured outsourcing destination for corporate firms. Recent policy announcements by the government and a stable domestic economy are all expected to attract investments into the country’s real estate sector and enable the ease of doing business here,” CBRE South Asia Chairman and MD Anshuman Magazine said.
The IT/ITeS sector continued to be the largest demand driver for office space, recording over 50 per cent of the total leasing activity recorded in the quarter, followed by engineering and manufacturing firms and banking and financial services sector, CBRE stated in a report. It noted that nearly 7 million sq ft of fresh office space came into the market during this period. Hyderabad and Mumbai accounted for more than 65 per cent of the total supply of fresh office space across leading cities.
Mumbai witnessed a 21 per cent rise in office space absorption with 1.4 million sq ft absorbed during the second quarter of 2016, and demand for office space largely concentrated across peripheral micro-markets. The city had over 2 million sq ft of new office space entering the market during the quarter.
Majority of office space demand in the city was led by corporate occupiers from the BFSI sector, followed by pharmaceuticals and engineering sectors. More than 17 million sq ft of corporate real estate was absorbed across the leading cities in the first half of 2016.