Office space absorption rate in top 8 cities down 32%

Top eight Indian cities witnessed a decline of 32 per cent in absorption of office spaces during the January-March period this year, compared to the previous quarter, realty consultant Cushman & Wakefield said today.

In its report, the global consultant Cushman & Wakefield (C&W) said Mumbai, Kolkata and Ahmedabad were the only markets that showed increase in absorption rate.

"The first quarter of the 2012 noted absorption across top eight cities at 7.0 million sq ft, registering a decline of 32 per cent over last quarter and 6 per cent over the same period last year," C&W said in a statement.

During the first quarter of 2012, the total absorption stood at 7.03 million sq ft as against the supply of 6.80 million sq ft of spaces in the eight cities -- Ahmedabad, Bengaluru, Chennai, Hyderabad, Kolkata, Mumbai, NCR and Pune.

In contrast to the overall average, Mumbai, Kolkata and Ahmedabad saw their absorption rate going up by 35 per cent, 33.7 per cent and 5.6 per cent respectively, the reports pointed out.

"Though the first quarter has seen subdued office absorption, majors in the IT/ITeS and domestic BFSI sectors have already indicated plans to grow, which will result in strong demand for office space during the year," C&W India Executive Director (Office Transactions) Ravi Ahuja said.

During the quarter, the National Capital Region witnessed low absorption with just 0.55 million sq ft due to cautious approach followed by the companies, C&W said.

"The start of the year for the office market in NCR has been slow as absorption has been extremely low," Ahuja said.