ASCENDAS india trust ANNUAL REPORT 2014/15
4 Overview of Office Space Market in India
Demand for office space picked up in most cities during 2014 due to improved occupiers’ sentiment. Gross absorption across
major 8 cities
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for the year 2014 was 42.1 million sq ft, an increase of 13% compared to the 37.4 million sq ft absorption in
2013. Increase in absorption is due to the revival of demand from the IT-BPM, manufacturing, consulting and BFSI sectors which
continue to grow at a healthy pace in tandem with economic growth. While Chennai, Kolkata, Mumbai and Pune witnessed
lower level of gross absorption
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, Ahmedabad, Bangalore, NCR-Delhi and Hyderabad witnessed an increase in gross absorption.
Nearly 20-25% of the absorption comprise relocations and/or consolidations, as many occupiers are increasingly leveraging on
current market conditions to relocate to better quality, more efficient and cheaper office spaces in the suburbs and peripheral
micro-markets across cities.
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Ahmedabad, Bengaluru, Chennai, Hyderabad, Kolkata, Mumbai, NCR and Pune
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Gross absorption is the total space occupied and includes new leases, relocations, expansion and consolidation and purchase of space for self use; does
not include renewals of existing leases, sub leasing and investment purchases.
Bengaluru
30%
Kolkata
2%
Hyderabad
14%
Mumbai
12%
Pune
11%
Chennai
10%
Ahmedabad
4%
NCR
17%
Gross Absorption 2014 – 42.1 million sq ft
Source: C&W Research
Bangalore registered the highest quantum of gross office space absorption at 12.6 million sq ft, which is approximately
30% of the total gross absorption. This is followed by NCR-Delhi region and Hyderabad with office space absorption of
approximately 7.3 million sq ft and 6.0 million sq ft respectively.
In 2014, fresh pre-commitments increased by 80% (10.9 million sq ft) as compared to 2013, reflecting improved sentiments
amongst corporate occupiers. Bangalore accounted for almost half of the share as it witnessed pre-commitments from major
IT-BPM and consulting firms.
The commercial office sector witnessed about 36.6 million sq ft of supply across the top eight cities during 2014, an increase
of 8.7% as compared to 2013. This increase was mainly due to the completion of some of the deferred projects across the
cities. Bangalore witnessed the highest quantum of supply of office space with 9.4 million sq ft, followed by NCR-Delhi and
Mumbai with supply of 8.7 million sq ft and 5.9 million sq ft respectively.
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I n d i a : E c o n om i c & C omm e r c i a l R e a l E s t a t e
O v e r v i e w
