Mumbai: Backed by a positive economic sentiment and business confidence, office space absorption during the January-March quarter increased 11 per cent to 8.8 million square feet across nine major cities, a survey found.
Office absorption leaped to over 8.8 million square feet, including pre-commitments of 8 lakh square feet, across nine major cities, upping the number by 11 per cent from October-December quarter, Colliers International said in a report.
“This absorption was primarily derived by the traditional demand driver, technology sector. The growth is mainly backed by positive economic sentiment, business confidence index which increased by 5 per cent in January and the GDP forecast of about 7.5 per cent,” Colliers India senior associate director (research) Surabhi Arora said.
Bengaluru remained the top contributor of the demand with a 33 per cent share, followed by the National Capital Region (Delhi, Gurgaon and Noida), Hyderabad, Pune and Mumbai.
“The majority of markets are enjoying this growth and overall office market sentiments are optimistic. We anticipate positive momentum in the coming quarter as the overall office leasing pipeline seems strong and is steadily growing,” she said.
Ms Arora further said positive economic growth coupled with increasing business confidence index due to government’s proactive policy initiatives will be the factors influencing the demand for office space in the coming quarters. Bengaluru witnessed a total office absorption of 2.65 million square feet, which is a 13 per cent jump from the last quarter.
IT and ITeS, or IT-enabled services, (also comprising technology start-ups and e-commerce companies) continued to remain the leading sector driving this demand with an 88 per cent share in overall absorption, it said.
The NCR clocked an overall absorption of 1.42 million square feet with Gurgaon’s commercial real estate market recording about 7 lakh square feet of office space uptake in the first quarter of 2016 as compared to 4.5 lakh square feet in the previous quarter, but about 30 per cent less than in Q1 2015.
Delhi and Noida recorded absorption of about 3.4 lakh square feet and 3.8 lakh square feet, respectively.
Hyderabad witnessed robust corporate demand in the first quarter with a gross leasing volume of 1.27 million square feet.