IT/ITeS corners lion's share of office space leased in eight major cities at 69 per cent

IT/ITeS sector continues to be the main driver of the office space market as it absorbed 69 per cent of the total office space leased in the January-March quarter in eight major cities, according to Cushman & Wakefield (C&W).

The property consultant said Bengaluru recorded the highest absorption at 3.77 million sq ft during the first quarter of 2015, out of 8.56 million sq ft leased in these cities.

These cities include Delhi-NCR, Mumbai, Kolkata, Chennai, Bengaluru, Hyderabad, Pune and Ahmedabad. 

"The total absorption for Grade A properties in office spaces was recorded at 8.5 million sq ft in Q1 2015, higher by 20 per cent year on year. Among the total share in absorption, IT/ITeS continued to remain the main driver with a share of 69 per cent of total lease space," C&W said in a statement. 

This was followed by service and industrial sectors like BFSI, consulting, engineering & manufacturing, which contributed 15 per cent in total absorption and play an active role in commercial real estate.

Other sectors, including FMCG, trading, education, logistics, shipping, travel and tourism, accounted for 13 per cent while the figure stood at a meagre 3 per cent for telecom and healthcare sectors. 

Cushman & Wakefield South Asia Executive Managing Director Sanjay Dutt said: "There is visibly increased leasing activity and appreciation of rent along with commercial terms. This is likely to continue as demand seems robust."

"With the change in global outlook towards India, we can look at hitherto stalled or delayed plans of global companies coming to India materialising. The new positive announcements by the government have helped bring fresh air to the real estate market in India. However, critical aspects like ease of business, land availability and business sustainability and continuity still remain a key concern." 

SOURCE: Economic Times