Bengaluru: Bengaluru and Hyderabad remain the top priority for IT offices in the second quarter of 2017 despite recent layoffs, delayed supplies. According to property consultant JLL India, the two cities accounted for about 47% of the total office space leased among the country’s top seven cities in the April-June period.
“Outsourcing work continues to come to India. There was a deferment of plans earlier, but now that has settled down,” said Raj Menda, corporate chairman of RMZ, a Bengaluru-based real estate firm.
According to data from JLL India, Hyderabad witnessed a 98% jump in net absorption of office space at 1.9 million sq ft. In Bengaluru, the growth was marginal at 0.4% to 1.7 million sq ft, reports ET.
Indian cities are severely dependent upon IT-ITeS for job generation and office space demand. Many IT firms in India lease posh spaces that charge rents below `65 ($1) per Sq ft a month.
“Certainly, in my numerous interactions with the C-Suite leadership of our occupiers over the past weeks, I hear a consistent and repeated message of continuing growth and transition to higher value addition and more sophisticated services. Demand for quality offices continues to be strong,” said Mike Holland, CEO of Embassy Office Parks.
Ramesh Nair, CEO & country head at JLL India said, the speed of growth of top technology firms was in single digit due to global uncertainty and technological disruption in the year of 2016. There is a fear that leasing by IT companies could plateau out due to clients’ digital transformation, automation, artificial intelligence and protectionism due to a tighter visa regime under the current US government, which could force IT firms to go ahead more cautiously.