The commercial realty segment in Bangalore saw an increase in absorption of large leased spaces during the April-June quarter, with big corporations such as Cisco, Deloitte, HCL Technologies, Ernst & Young, L&T and CIBER Inc expanding office space at a faster clip.
Bangalore absorbed over three million sq ft during the quarter, real estate analysts said. “The Peripheral Business District of Outer Ring Road (ORR), Whitefield, Electronics City and North Bangalore are being preferred by corporations looking for consolidation and expansion plans,” according to a report by global real estate services firm CB Richard Ellis (CBRE).
HCL Technologies leased 1.4 lakh sq ft in Electronics City and Logica signed up over 1 lakh sq ft on ORR, the CBRE report stated. Real estate consultant Cushman & Wakefield pointed out that Ernst & Young had leased 1.6 lakh sq ft in Whitefield.
Lifesize Communication leased 21,764 sq ft in the Central Business District area, Accenture took up over 1.3 lakh sq ft on ORR, and Fidelity Information Service and Huawei leased 93,480 sq ft and 31,458 sq ft, respectively, in Whitefield, said Jones Lang LaSalle, another leading real estate services firm, in a report.
IT/ITes sector
The IT/ITeS sector led the pack, with the sector taking up over 170 per cent more space this year compared with last year. The IT/ITeS sector absorbed approximately 2.9 million sq ft during the quarter. Most of the new absorption of commercial space was concentrated in the peripheral areas of Whitefield and ORR, Cushman & Wakefield said in its report.
Space supply
The city recorded fresh office space supply of only 3-4 million sq ft, “all of which was non-SEZ space”, said Mr Naveen Nandwani, Office Director (Hyderabad & Bangalore), Cushman & Wakefield.
Mr Nandwani said that the sudden slowdown in SEZ development activity has freed up space for other company office spaces. “The concentration of IT/ITeS in the peripheral locations will be of significance as it is expected to lead to another wave of development in these areas.”
The combination of strong demand and constricted supply has been instrumental in bringing down the city's overall vacancy levels to 13.3 per cent, according to the Cushman & Wakefield report. This has perpetuated rental escalations in certain micro markets, it says.
Hiring up
Hiring firms too are upbeat about IT/ITeS hiring in the city. According to staffing solutions company, TeamLease, the employment outlook for Bangalore has gone up with aggressive hiring by the IT/ITeS sector. . Job portal Monster.com has reported a 10 per cent year-on-year rise in online job opportunities in the city.