Office space: B'lore among top 2 cities globally?

Bangalore, Mar 30: The office space absorption figures for 2006 are released and Bangalore's concerns are put to rest. Bangalore still continues to be a major IT/ITES hub. The absorption figure in 2006 in the country's IT capital has reached a new high of 14.2 million sq ft, the highest among metros in India, and probably the second highest in the world after Tokyo.

This makes a whopping 53 pc growth over the last year. The office space absorption figures (2005) for Bangalore stood at 9.28 million sq ft, placing it in third position after Tokyo (12.33 million sq ft) and London (9.96 million sq ft) in the list of the top four cities globally in office space absorption. With the increase in absorption (an increase of 4.92 million sq ft) Bangalore is likely to figure in the top two cities globally in office space absorption this year, reveals a survey carried out by international real estate consultancy firm DTZ Debenham Tie Leung.

Rentals in Bangalore's CBD have reached a peak of Rs 65 per sq ft per month, with a further increase expected owing to the lack of any new supply. 70 pc of total absorption of office space in the city was by knowledge based companies. In the CBD, the vacancy level is less than 0.5 pc while the rest of the city has a vacancy rate of 7 pc -8 pc, which is expected to remain stable due to the huge pipeline supply in near future.

Despite a robust performance this year, the NCR's absorption figures continue to lag behind that of Bangalore. As per the survey, Delhi has witnessed an overall absorption of 10.6 million sq ft of commercial Grade A office space in 2006. The total absorption for the year has been the highest for NCR. The CBD, here, also saw a significant rise in rentals, the CBD commanded rentals of about Rs 280 per sq ft per month, a 100 pc increase over last year. "Rentals here continued to increase due to the MCD sealing of illegal commercial spaces, apart from the steady demand by the expansion plans of companies in NCR," added Mr Srivastava. SBD rentals, at Rs 200 per sq ft per month, too witnessed a considerable increase of about 29 pc over the previous quarter and 43 pc increase over the previous year.

Further, the survey states that the total absorption in Mumbai in 2006 was 6.4 million sq ft. The demand for office space in the financial capital continues to be driven by IT/ITES, financial services, insurance and telecom sectors. According to the survey, rentals in SBD (Worli, Lower Parel) and Bandra-Kurla Complex are almost 100-120 pc higher than those prevailing in the previous year. However, no significant appreciation in rental values were reported in other micromarkets over the previous quarter, with rental values remaining momentarily stable at the 'peak' achieved in last quarter.

OneIndia News