Office Space Absorption Lowered: Bangalore Market Affected

Compared to the previous year, in 2012, office space absorption fell sharply in Bangalore. The decreased demand from the IT and ITeS sector is pointed as the main reason for this lowered office space absorption.

Office space absorption in Bangalore is always dependent on the IT and ITeS sectors. Whenever there is a higher demand from these two sectors then the city experiences better office space absorption and it is reverse when their demand is lower.

The same has occurred in the city now. Real estate experts opined that the city has witnessed lower office space absorption due to the fall of IT and ITeS demand. According to the real estate experts, office space absorption dropped in Bangalore by 24% in 2012.

Global real estate consultancy firm Cushman & Wakefield reported that, in 2012, only 7.3 million sq. ft. was absorbed as against the 9.59 million of the 2011. IT and ITeS Sectors shared a major part of office space absorption in 2011 while their share is lower in the 2012. While in 2012 their share stood just near to the half mark, it was over three fourth in the previous year.

Knight Frank, another global realty consultant, reported that the fall was very sharp in the third and fourth quarters of 2012.

However this lower demand was visible not only in Bangalore but whole across the country. Real estate consultancy firm DTZ India’s Vice-president Mr. Satish B N said that the demand for IT and IT enabled Services was weak across the globe.

IT sector was affected by the European crisis and the sluggishness existed in the American economy. These had an adverse impact on the IT sector, reported Mr. Avinash Rao, regional director- South, Knight Frank India. According to Mr. Rao these situations have made these sectors very cautious and watchful.

However due to the increased office space absorption by the other sectors, Bangalore stood stable and there wasn’t any deep fall in the commercial market. The rentals in the city also rose by 17%. There has been a steady decrease in the amount of vacant office space as well in the city.

Post a Comment

Your email is never shared. Required fields are marked *