 "Office demand to outstrip supply in tech hubs like Pune, Bengaluru")
Growing office demand will outstrip supply in technology-sector driven markets such as Pune, Bengaluru, and Hyderabad, said a new report.
This should therefore lead to downward pressure on vacancies and an upward pressure on gross office rents in these markets, said property consultant Colliers International in the latest office markets report.
In contrast, traditional commercial markets such as Mumbai and NCR are likely to remain stable in terms of rents and vacancy due to a stable demand and supply scenario, it said.
Overall, Grade A absorption totalled 9.6 million sq ft making it 28.26 million sq ft so far in 2016.
Overall office demand in current quarter failed to keep pace with the previous quarter as about 2.27 million sq ft gross leasing volume was recorded in Bengaluru. This was about 36% less than the last quarter.
"Despite decrease in overall leasing volume, in our opinion the city has strong demand fundamentals as we recorded
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several pre-commitments and Build-To-Suit (BTS)transactions during the quarter," Colliers said.
A slight uptick in absorption was observed in the Pune commercial market since last quarter with 0.9 million sq ft, making it 2.74 million sq ft YTD.
"Pune market promises significant talent pool in the IT-ITeS industry and hence the industry continues to thrive in the region.
Accordingly, a big chunk of leasing activity was taken up by the IT-ITeS sector in this quarter as well, amounting to around 68% of the total transaction volume,"it said.
Accordingly, a big chunk of leasing activity was taken up by the IT-ITeS sector in this quarter as well, amounting to around 68% of the total transaction volume,"it said.