Over seven million sqft of office space was taken up in the second quarter of this calendar year, according to a CB Richard Ellis report.
In the first quarter, 5.4 million sqft was absorbed across major cities.
Mumbai, National Capital Region and Bangalore alone took up 75 per cent of the total space in the second quarter.
However, supply continued to overtake demand in the second quarter, with over nine million sq ft of office space added.
The report said new supply was largely concentrated in NCR, Bangalore and Mumbai and was almost 96 per cent of the entire space added in the present quarter. Most of the supply that came in was from developments that were delayed for the last several quarters, especially in Mumbai.
Other cities such as Chennai, Pune and Hyderabad experienced delays in project completions and rationalisation of the supply pipeline.
Mr Anshuman Magazine, Chairman, CBRE, South Asia, said, “After the initial sluggishness in Q1, 2012, the rise in absorption of office space across key markets is good news for the real estate sector. However, given the current economic scenario, coupled with a slowdown in large space requirements from big global companies, overall, the office market may witness a drop in absorption this year.”
The demand-supply gap continues to pressurise values across most micro-markets and could have negative implications on the rental growth, he said.