Bangalore, most important IT- Hub in India, sees lower office space absorption due to the decreased demand from the IT and ITeS sectors.
Office space absorption in Bangalore is directly related to the performance of IT and ITeS sectors. When these sectors’ demand is better the office space absorption in the city is also better. In the same way when IT and ITeS sectors do not raise much demand then the office space absorption also falls down.
Recent reports from the real estate experts show that the city witnesses a 24% fall in office space absorption. The experts well relate this lower absorption to the weak demand raised by IT and ITeS sectors.
Cushman & Wakefield, a global real estate consultancy firm, reported that only 7.3 million sq. ft. was absorbed in 2012. This is far below than the 9.59 million sq. ft. absorption of the 2011.
Majority of the demand in 2011 was raised by IT and ITeS sectors while in the year 2012 their demand stands just above the half-line. From the above-given figures one can realize how important the IT and ITeS sectors in Bangalore.
The report of Knight Frank also depicts the same. According to their report the fall was very sharp in the last two quarters of 2012. Knight Frank’s Mr. Avinash Rao, regional director- South India, said that the European crisis and the sluggish American Economy had affected IT and ITeS sectors very badly. According to him, these have cautioned these sectors to be highly watchful.
According to DTZ India the demand from IT and ITeS sectors was very weak across the globe and is not limited to India or Bangalore alone. Mr. Satish B N, Vice-president of DTZ India, said that there was a sharp fall in the demand raised by the IT and ITeS sectors across the world.
Though there was a weaker demand from the IT and ITeS sectors, Bangalore hardly faced a sharp fall in the office space absorption. Thanks to the increased demand from banking and other sectors which have made the commercial market of Bangalore a stable one despite the weak IT demand.
