New Delhi: Hyderabad saw a maximum increase of 55 percent in net office space absorption in January-June period among eight top cities on improving business climate in the city, according to realty consultant Cushman & Wakefield.
Net office space leasing in Hyderabad rose to about 2.9 million sq ft in the first half of 2016 calendar year from about 1.9 million sq ft in the corresponding period of 2015.
"Improving business climate and the Telangana government's efforts to create more visibility for 'Brand Hyderabad' led to the city witnessing a steep rise in net absorption in H1 2016 to 2.9 million sq ft, a 55 percent increase from corresponding period last year," C&W said in its report.
The competitive rentals, quality infrastructure and a proactive government have been attracting global companies to increasingly prefer to set up offices in the city, it added.
Hyderabad continues to witness strong demand for space from IT-ITeS and technology companies. Net absorption during April-June period stood at roughly 1.7 million sq ft, of which 70 percent came in the form of previously recorded pre- commitments by IT-ITeS companies.
Among the eight major cities, the net absorption of office space increased in Hyderabad by 55 percent, Delhi?NCR (+39 percent), Ahmedabad (+27 percent) and Kolkata (+10 percent) in the first half of 2016 compared to same period last year.
However, net leasing of office space fell in Chennai (-51 percent), Pune (-41 percent) Mumbai (-36 percent) and Bengaluru (-34 percent) during the period under review.
Overall in the eight cities, the total net absorption of office space declined by 18 percent to 14.5 million sq ft during January-June period of this calendar year, while supply fell by 7 percent at 19.9 million sq ft.
Commenting on the fall in leasing activities, C&W India Managing Director Anshul Jain said this is going to be only temporary as the second half looks promising.
"A large number of companies have committed space foreseeing limited availability of upcoming quality stock in select markets which will push up absorption in the second half of the year. These pre-commitments are bound to steer net absorption, going forward," he added.