Driven by small and medium enterprises in engineering and pharmaceutical sectors, the commercial office space in Ahmedabad saw its absorption going up by six per cent in the first quarter of 2012. After Mumbai (35 per cent) and Kolkata (33.7 per cent), Ahmedabad was the only market to show a rise in office space absorption, according to the latest office market report by real estate consultancy Cushman & Wakefield.
"Irrespective of the slowdown, the demand for commercial space in Ahmedabad did not show any slowdown in the first quarter of 2012. The absorption for commercial office space has been largely driven by the small and medium enterprises in the engineering and pharmaceutical sectors," said Ravi Ahuja, Executive Director, Office Transactions, Cushman & Wakefield India.
In terms of volumes, Ahmedabad recorded a total absorption of 106,100 sq ft, registering an increase of approximately six per cent over the fourth quarter of 2011. This, despite the fact that the city saw a decline in demand for office space in the fourth quarter of 2011. Moreover, 2011 Q4 alone saw Ahmedabad's office space absorption at 100,430 sq ft. However, the city did not witness any fresh supply during the first quarter of 2012.
As against stable rentals in Q4 of 2011, the city also witnessed increase in rental values upto six per cent across various micro markets in Ahmedabad. Rental values across the city appreciated over the last quarter, with highest appreciation upto six per cent noted at Ashram Road and CG Road due to lack of availability of Grade A office space, the report stated. In fourth quarter of 2011, however, the rental stability was attributed to high vacancy levels and an upcoming supply.
Meanwhile, the good run with space absorption is expected to continue in the second quarter of 2012 in Ahmedabad. "It is expected that the space absorption is likely to remain stable in the next quarter with BFSI and small scale industries expected to be the key demand drivers," Ahuja added.
