IT sector rules B'lore real estate mart: Report

A report surveying the prevailing trends in Bangalore’s real estate scene in August 2011 by research firm Knight Frank has stated that driven by the growth of IT/ITeS sector, most of the companies are vieing for a chunk in the City’s real estate landscape.

“The fact that the City is home to over 2,000 STPI (Software Technology Parks of India) registered companies and employs over 5 lakh people, has evidently proven that Bangalore is a preferred IT destination for setting up of a new unit or expansion of existing operations of IT/ITeS companies,” the report says.

According to the report, approximately 2.09 million square feet of office space was absorbed in the first quarter (Q1) of 2011 and another 3.4 million square feet in the second quarter (Q2), as against absorption of around 3.05 million square feet in the same quarter of last year.

Across the distribution of office space among different sectors such as healthcare/pharma, IT/ITeS, engineering, BFSI and so on in Q2 2011 over the same quarter a year ago, the IT/ITeS sector amounts to the greatest absoprtion, with its share of office space marginally going up to 64 per cent of total transacted office space in Q2 2011 (amounting to around 2.14 million square feet).  “Key transactions were led by companies such as Intel, HCL, Zynga, Siemens, AMD, Cisco and Sapient,” the report says.

Non-IT sectors
This compares with the lesser amount of office space absorbed by non-IT sectors. While the education and telecom sectors occupied 13 per cent and 9 per cent, respectively of the total space leased out in Q2 2010, they did not take part in the office space absorption scenario of Q2 2011.

On the contrary, it was the BFSI sector and the consulting sector that featured prominently in Q2 2011, accounting for around 11 per cent each of the total office space leased.

The report states that with the further expansion of existing operations of the IT sector and entry of newer sectors, the City is bound to see improved uptake of office space in the next two quarters of this year.