Highest office property taken up this Q4 in the past three years

Demand sustained throughout the year; and space take-up annually increased by around 10%

The last quarter of 2014 has seen over nine million square feet of corporate space take up, which is the highest quarterly levels over the past three years, said a new study.

Powered by increased levels of activity in corporate real estate transactions in Bengaluru (37%) and national capital region (24%) total office space take-up was over 33 million sq ft during 2014, said Anshuman Magazine, chairman and amanaging director of property consultant CBRE said in a note released today.

The demand for commercial office space remained sustained throughout the year; and year-on-year space take-up increased by around 10% over 2013., he said.

"The year also saw significant investor interest in completed and well-leased core commercial assets and IT parks. This willingness to invest in the country-especially on the part of multi-national organisations-indicates an increased confidence in the India growth story in general and the government in particular," Magazine said.

Commercial properties market is seeing a revival of sorts for the last couple of quarters. According to HDFC Securities, third quarter of 2013 recorded absorption of 10.1 million sq ft, which is 40% up on quarterly basis and 95% up on a yearly basis. According to the brokerage, this is the first time the pan India quarterly absorption crossed 10 milion sq ft.

"With improved sentiment in capital markets and corporate activity, there are several deals in the pipeline that may drive absorption levels upwards from CY 2015," said Adhidev Chattopadhyay, an analyst with HDFC Securities, in a recent report.

According to Magazine, all major cities had see demand increase for office spaces. "While a rationalized supply and increased focus on committing space in under-construction projects in Mumbailed to a drop in transaction activity; a subdued political climate in Hyderabad during the first half of 2014 contributed to a similar drop," he said.

Office properties market is expected to do well in 2015 too. "The fundamentals are in place for the global economy tomove ahead in 2015.There are signs of business conditions turning the corner and better news is anticipated ahead for India's  realty sector. The factors most likely to further impact the real estate market positively are stronger GDP growth; more relevant reforms; and the paring of interest rates," Magazine said.