IT sector largest leaser of office space in country

The IT and ITeS sectors accounted for the lion's share of the space available

The information technology sector has emerged as the largest leaser of office space in the country, with 70 per cent of the total absorption in Grade A office space, according to a real-estate report.

The total absorption for Grade A properties in office spaces was recorded at 8.5 million sq ft, higher by 20 per cent on a year-on-year basis.

Bengaluru, Chennai, Kolkata, Mumbai and Pune have had the most notable increases, according to the first quarter (Q1) 2015 report of Cushman & Wakefield. Offices with grade-A facilities are those which are centrally air-conditioned and have all good facilities.

The office market saw the strongest growth in Bengaluru — a whopping 500-per cent increase in absorption rate. Recently, e-commerce giant Amazon leased out 1.2 million sq ft office space in Bengaluru. During Q1, Oracle, too, rented a 400,000-sq ft space in the JP Nagar submarket.

“The first quarter has seen a trend setting start to the year and the momentum is expected to remain steady. Also, with the change in the global outlook towards India, we can look at hitherto, stalled or delayed plans of global companies coming to India materialising. There is visibly increased leasing activity and appreciation of rent along with commercial terms. This is likely to continue, as demand seems robust,” said Sanjay Dutt, executive managing director, Cushman & Wakefield, South Asia.

Among the total share of absorption, information technology and IT-enabled services (IT/ITeS) continues to remain the main driver, with 69 per cent of total lease space. Bengaluru formed 44 per cent of the total share of absorption.

This was followed by services and sectors like banking, financial services and insurance, consulting, engineering & manufacturing, which contributes a 15-per cent share.