Office space addition highest in last nine quarters: report

The addition in third quarter was 44% on a yearly basis and 21% on a quarterly basis, said a report by property consultant CBRE

 

The country saw a little more than 10 million sq ft of office space addition in July-September, highest in nine quarters. This is a rise of 44 per cent on a yearly basis and 21 per cent on a quarterly one, says a report by property consultant CBRE.

Interestingly, Ccommercial (Non-IT) developments accounted for more than half of the newly completed supply, accounting for a share of more than 50 per cent

Most of the new supply released during the quarter was concentrated in locations such as Gurgaon in Delhi NCR, Outer Ring Road (ORR), Whitefield and Hebbal in Bangalore; IT corridor / extended IT corridor in Hyderabad; Airport Road, Kharadi, and Pashan in Pune; and Thoraipakkam / Sholinganallur in Chennai.

Large commercial and SEZ developments were completed across Bangalore, Pune, Chennai, Gurgaon and Hyderabad during the quarter.

Robust demand resulted in more than 9 million sq. ft. of office leasing activity in the September quarter; clocking a growth of about 20 per cent on an annual comparison and around 6 per cent on a quarterly basis, CBRE said.

"This rise in absorption activity, primarily driven by corporate occupiers from sectors such as IT/ITES, banking / financial services, and e-commerce companies, reflected a sustained improvement in office space leasing sentiments across," it said.

The period under review observed strong demand from companies seeking office space in Delhi National Capital Region (NCR). The NCR accounted for more than 31 per cent of the total space transacted in the country during the quarter; with Gurgaon retaining its position as the most preferred destination for corporate occupiers in the region. The NCR was followed by Bangalore with a share of 22 per cent and Chennai with a share of 17 per cent.

Although Mumbai, Pune and Hyderabad office markets also attracted healthy enquiries from office occupiers, these failed to translate into transactions during the quarter, and hence, absorption remained low with each city garnering a share of only around 9 per cent in Q3 2015, it said.