Mumbai has recorded the highest office space absorption across cities in Q3 of calendar 2012, according to real estate consultancy Cushman & Wakefield.
The total office space off-take was 2.23 million sqft (msf), which is an increase of more than 50 per cent over the previous quarter. Chennai was second at 1.32 msf, followed by Bangalore at 1.25 msf and NCR at 1.2 msf.
The off-take in Mumbai was led by the BFSI sector accounting for about 30 per cent of the total space utilised in the quarter. With many financial institutions undertaking consolidation, there is an increase in uptake of large, contiguous spaces across the city.
The highest absorption was recorded in the micro markets of Bandra- Kurla Complex and Lower Parel due to availability ready for possession or near completed office spaces.
With a total supply of 5.35 msf, supply in the city saw a 117 per cent increase over last quarter.
RENTALS DROP
The vacancy rate, however, increased from 17 per cent in the previous quarters to 20 per cent in Q3 on account of large supply infusion that surpassed absorption. Prominently, the Andheri- Kurla area recorded a decline of about 11 per cent in rental values over previous quarter due to high vacancy of over 25 per cent in Grade A supply. The central business district comprising Nariman Point also saw a marginal four per cent dip in rentals.
The total absorption for office space across major cities was recorded at 7.8 msf, which was marginally higher than previous quarter.
The total fresh supply of office spaces in Q3 was recorded at 11 msf which was an increase of 13 per cent over previous quarter.
Mumbai recorded the highest supply of approximately 5.35 msf followed by Bangalore that saw infusion of 1.66 msf. Chennai also recorded a significant increase in supply over the previous quarter, which was recorded at 1.2 msf.
Sanjay Dutt, Executive Managing Director, South Asia, C&W India said, “India’s office market conditions are favourable for the corporate world at this time when there is a sizable availability of ready or near ready supply. Also double digit vacancy numbers is helping in keeping prices at stable levels. Indian office market is expected to remain stable in short to medium term and we hope to see stable absorptions in the range of 28-30 million for 2012 by the end of the year.”
shanker.s
@thehindu.co.in