Mumbai: Nearly seven million sq ft of office space were leased out during the April-June period, notwithstanding a sluggish real estate market for large space requirements, says a survey.
According to the quarterly report by global property firm CBRE, major cities such as Delhi NCR, Mumbai and Bangalore accounted for over 75 per cent of the entire space absorbed during the three month period.
"After the initial sluggishness witnessed in Q1 of 2012, the rise in absorption of office space is good news for the sector.
"This is an encouraging number when compared to the space take up recorded in the first quarter of 2012, which stood at only around 5.4 million sq ft," CBRE (South Asia) Chairman and Managing Director Anshuman Magazine said in a statement.
During the January-March period, 5 million sq ft office space was leased out.
Nearly 9 million sq ft of office space were added during the April-June quarter, which was largely concentrated in Delhi NCR, Mumbai and Bangalore, comprising almost 96 per cent of the entire quantum added.
Most of the supply added comprised developments that were delayed for the past several quarters, especially in Mumbai, the report said.
"Other cities such as Chennai, Pune and Hyderabad experienced delays in project completions and a rationalisation of the supply pipeline," it said.
However, given the current economic scenario, coupled with a slowdown in large space requirements from big global companies, overall, the office market may witness a drop in absorption this year, Magazine said.
"The demand-supply gap continues to put pressure on value across most micro-markets and could have negative implications on the rental growth. Improvement in the current situation will depend on the global economic environment and the government policies in India," he added.
The report further says the IT-SEZ segment may lose its attractiveness amongst occupiers due to continuing lack of clarity on tax related incentives.
"Occupiers are expected to increasingly focus upon affordable suburban and peripheral micro markets with consolidation being a focus and built-to-suit developments gaining popularity," the report said.
First Published: Tuesday, July 10, 2012, 18:39