OFFICE SPACE ABSORPTION

The second quarter of 2011 witnessed almost eight million sq.ft. of office space being absorbed across the key markets in India, according to CB Richard Ellis India’s latest report titled ‘India Office Market View - Q 2, 2011’ as opposed to six million sq ft in Q1 2011. NCR, Mumbai, Bangalore and Chennai were the leading cities; accounting for almost 80 per cent of the entire space getting absorbed in the country. The India Office Market View report reviews rentals for Grade A office space across seven cities namely Delhi NCR, Mumbai, Bangalore, Chennai, Hyderabad, Pune and Kolkata.

“Office space absorption in key micro markets in the country has been increasing over the past few quarters. This steady pace of space take up is primarily fueled by sustained economic development and increase in outsourcing business, resulting in robust corporate expansion plans. However, though there is continued demand most of the office micro markets have an oversupply situation. With additional space to be added in the future especially in IT/SEZ space, rental values in certain micro markets are expected to remain flat,” said Anshuman Magazine, Chairman & Managing Director, CB Richards Ellis South Asia Pvt. Ltd.

 The second quarter of 2011 witnessed the addition of almost 10 million sq ft of new supply in all leading cities of the country.

This was largely dominated by Mumbai, Pune and Kolkata, comprising almost 80 per cent of the total stock that came on stream in Q2 2011. While demand levels have remained buoyant in the last few months, the large supply pipeline, might alter the demand curve in the coming few quarters.