 "Office space vacancy hits 5-yr low")
At a time when other state capitals in South India have experienced double digit growth when it comes to net absorption of office space, Chennai has grown at just 4%, a report by real estate consultant Cushman and Wakefield reveals. The city, which houses major IT companies, and is considered to be one of the auto hubs in the country, saw only 2.8 million sq ft of fresh absorption during 2015, the report states.
The report further states that net absorption in 2015 across the country was noted at 33.47 million square feet (msf), a 1% decline over 2014, owing to increased relocations and consolidations.
Among Indian cities, Bengaluru topped the overall net absorption, followed by Pune and Hyderabad. The highest increase was noted in Pune, with net rising by 61% in 2015 compared to last year. While Chennai had a net absorption of 2.8 million sq ft, up by 4%, Bengaluru registered a net absorption of 10.3 million sq ft, up by 11% year-on-year.
Hyderabad saw a 25% jump in net absorption to 5.5 million sq ft.
Net absorption refers to the incremental new space take-up; renewals not included in leasing activity statistics.
The real estate consultant said general positive business sentiments and stronger growth recorded by global and companies in India over the last few quarters have led to companies firming up expansion and consolidation plans as they foresee higher potential on the back of an optimistic business outlook, thus maintaining the levels of net absorption.
However, in 2015, a large number of companies went into consolidating their operations in larger spaces in a bid to improve productivity, brought about by combined efficiencies which led to total leasing activities breaching 50 msf in 2015.
Leasing activities during 2015 recorded a 15 % increase over 2014 on the back of increased confidence brought about by steady economic growth and renewed corporate confidence especially in the IT-ITES and e-commerce sectors.
