Bengaluru tops the charts
with highest net absorption of 8.9 msf
Ahmedabad registers a
163% increase in net absorption in 2014;
Kolkata records highest
overall vacancy of 28% followed by Delhi-NCR at 26.8%.
January, 2014: The top eight cities of India
recorded overall net office space absorption of 32.5 msf
in 2014 recorded Cushman & Wakefield, global real estate consultants. The
overall net absorption increased 28% year-on-year (y-o-y).
witnessed the highest increase of 163% in net absorption albeit on a low base. Kolkata saw a decline of 33% in overall net absorption from the previous
year while Mumbai and Pune recorded a marginal 6% and 4% decline respectively. Bengaluru
outpacing other cities by registering 8.9 msf net absorption during the year, a
growth of 87% y-o-y. Delhi-NCR recorded 6.2 msf net absorption followed by
Mumbai (4.5 msf) and Hyderabad (4.4 msf). Majority of the absorption in
Hyderabad during this year was driven by pre-commitments from previous years.
increased by 9% y-o-y, to a total of 36.6 msf supply in 2014.92% (33.6 msf) was
contributed by Grade A developments. Bengaluru recorded the highest supply addition
of 9.4 msf, registering a 67% increase in yearly supply. It was followed by
Delhi-NCR (8.7 mf) and Mumbai (5.9 msf).
Dutt, Executive Managing Director, South Asia, Cushman & Wakefield
said, “With the election of a stable single party
government coming into power by the mid of 2014, overall business sentiments
have improved with the office market seeing significant levels activities in
the second half of 2014. Many companies began executing their growth strategies
with greater confidence leading to improvement in demand for office spaces. We believe
that demand for office will remain robust in the next two years as many
companies continue to relocate and adopt workplace transformation strategies,
pick-up in hiring and growth in demand for new developments will lead to an
overall improvement in absorption volumes. Rentals will continue to remain largely
stable due to likely high supply addition expected in 2015, which will in-turn
help many markets remain occupier favourable in the short term.”
All Grades Statistics
further continued, “2014 saw a
significant increase in the number of large deals with office spaces over
200,000 sf contributing to approximately 50% of the total Grade A office
leasing. We expect to see more such of larger space deals in the New Year with
many global and national companies looking at expansion and relocation spaces.
We are also expecting to see similar or even larger deal. We estimate the
office Grade A net absorption to be approximately 37 msf by end of 2015.”
Bengaluru, Chennai, Delhi-NCR, Hyderabad, Kolkata, Mumbai and Pune
 Net absorption refers to the new / additional
occupation activity and includes only the incremental new space take-up in
instances of relocations and expansion from within the city; does not include
lease renewals and relocations to same sized office spaces.