Bengaluru tops in office space absorption

India's technology capital, Bengaluru has seen the highest absorption of office space across the country during the first six months of 2018.

The city accounts for 30.2% of the total office space leased out nationally at 6.5 million sq feet. The country as a whole saw absorption of 21.5 million sq feet office space during this period.

According to global real estate advisory firm, Knight Frank, the growth in office space was on account of startup and IT/ITeS boom.

"The city is the favourite destination for the startups and there is a lot of demand coming from that side," Shantanu Mazumder, Senior Branch Director–Bengaluru, Knight Frank told DH.

The city has been far ahead in terms of office space consumption from second placed Pune, which has seen 3.9 million sq feet leased out in the first half of the calender year 2018. Pune is closely followed by National Capital Region (NCR) with 3.4 million sq feet leased out, Mumbai (2.9 million sq feet) and Hyderabad (2.7 million sq feet).

The Bengaluru city has seen a jump of 10.2% on yearly basis in office space transactions, from 5.9 million sq feet in first half of 2017. As many as 141 deals with average ticket size of 46,420 sq feet each were transacted, a 10-year high volume with the vacancy remaining at its lowest levels.

Buoyed by demand from IT/ITeS and co-working operators, Outer Ring Road (ORR) as a micro market continued to outperform the others accounting for 43% of Bengaluru’s total leasing volume.

"It is interesting to note that the average deal size for all transactions concluded in ORR alone measures nearly 94,000 sq feet, indicative of large office formats dominating occupier interest in this belt," the Knight Frank half yearly report said.

Co-working garners 19% of total H1 2018 transactions.

On the residential front, Bengaluru's stellar demand prevented pan India decline in sales. The city saw 22% jump in the housing units sold, on a yearly basis. The city sold 25,802 of the 1,24,288 housing units sold nationally, 20.8% of the national share. The city is second only to Mumbai, that sold 32,412 units, albeit a 1% uptick.