As per the report, the substantial increase was due to significant pre-commitments (400,000 sq ft) from previous quarters, which were absorbed during the first quarter 2014.
"The net absorption was concentrated in the sub-markets of Gandhinagar (66 per cent), Prahladnagar (25 per cent) and Sarkhej-Gandhinagar Highway (10 per cent) with transaction activity driven by Banking Financial Services and Insurance (BFSI) (49 per cent), IT-ITeS (33 per cent) and Pharmaceutical sectors (6 per cent). Approximately one million sq ft of space became operational during the quarter; a six per cent increase compared to the same quarter last year," the report stated.
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However, supply during the quarter was concentrated in Gandhinagar, Prahladnagar and S.G. Highway with 80 per cent of it in Grade A developments. The high levels of net absorption helped keep vacancies in check, which increased marginally to 36.2 per cent in Grade A developments due to the new supply. The rental values continued to remain stable across all major sub-markets during the quarter.
In the top eight cities that the report covered, net office space absorption was 58 per cent higher than last year at 5.9 million sq ft.
"We can see that despite an overall economic condition of wait and watch, there has been an uptake of office space. Whilst some of the transactions are spillovers from the last quarter as deals could not be completed in time for the year-ending, there are also significant closures ahead of the general and some state elections next quarter. We expect the next few weeks to be moderately slow in terms of uptake of space as businesses await the results of the new government. Even while occupiers remain conscious of their expansion programmes, we expect a new lease of momentum to start once there has been some concrete result from the general elections," said Sanjay Dutt, executive managing director of Cushman & Wakefield, the real estate consulting firm.