In Q1’15, in absorption of office space leasing in Delhi/NCR has witnessed the fall of 57%. The reason seems to be the delay in corporate decisions; however, it is expected to register an uptick in coming quarters.
Cushman & Wakefield, the property consultant, also mentioned in a statement that, “NCR has registered a significant decline in office space net absorption at 60 per cent in Q1 2015 as against the same time last year, largely due to the result of any delays in decision making as demand still remains strong from occupiers given that a number of transactions are in the pipeline.”
Compared to previous year:
• Net absorption of Leasing of Office Spaces in Delhi/NCR fell to 6.26 lakh sq. ft. in Q1’15 from 14.61 lakh sq. ft.
• Net office space leasing in India’s other top eight cities (Ahmedabad, Bengaluru, Kolkata, Pune, Chennai, Delhi/NCR, Hyderabad, and Mumbai) rose by 35% to 7.97 million sq. ft. in Q1’15 from 5.91 million sq. ft.
Cushman & Wakefield also highlighted, “Chennai and Bengaluru saw the highest increase in net absorption as demand from IT-ITES companies remain strongest for the southern cities in the improving business environment.”
On the other hand, leaving behind leasing of office spaces in Delhi/NCR, Bengaluru jumped over at 3.2 million sq. ft. during Q1’15 from mere 5, 31,000 sq. ft in the same quarter of the previous year. Though, the office space leasing drops in Delhi/NCR is not that bad compare to a net absorption in Ahmedabad (-75 per cent) and Hyderabad (-37 per cent).
C&W South Asia Executive Managing Director Sanjay Dutt stated, “We expect to see a growth in the office space absorption of approximately 15 per cent by the end of 2015. Basis the same, we expect total net absorption to be recorded between 36-37 million sq. ft. at the end of 2015, the majority of the demand coming from the IT/ITeS and the BFSI sector in key markets of Bangalore, Delhi/NCR and Mumbai.”
Basis the net absorptions of office space leasing in Delhi/NCR, it is not wrong to expect new occupational activities and increased instances of relocation and expansion within the vicinity.
The sole reason that stands behind such activities is the increased space take up in Delhi NCR. Though, the point to be kept in consideration is that it does not include lease renewals and relocations to same sized office spaces. C&W said, there was also a decline of 2% in the Q1’15 at 7.4 million sq. ft. from the year-ago period on the supply front.