New Delhi: The absorption of office space is estimated to rise by 24% to 32.65 million sq ft during 2010 in the eight major cities as corporates are on an expansion spree, according to property consultant Cushman and Wakefield.
The absorption stood at 26.29 million sq ft in 2009, the consultant said in a statement.
Out of total absorption this year, Bangalore topped the list with 9.9 million sq ft, followed by national capital region (5.44 million sq ft), Hyderabad (5.25 million sq ft) and Mumbai (4.37 million sq ft).
When compared with last year, Hyderabad witnessed the maximum growth in absorption at 96%.
The report further revealed that the fresh pre-commitments for office space created in 2010, due to be absorbed over the next two years, accounted for 9.2 million sq ft, which is double of last year’s 4.7 million sq ft and stands testimony to the growth plans by the corporate sector.
Almost all the major cities recorded pre-commitments of commercial office space in 2010 with Bangalore, Mumbai and Pune being the most significant ones registering over one million sq ft, C&W said.
“The pre-commitments are back and it is a healthy indication of the revival of the office markets. This also signifies that the corporate sector has been actively planning their expansion strategies which were deferred earlier due to the unfavourable economic environment,” C&W executive director (occupier services) Arvind Nandan said.
Supply in 2010 was recorded at 43 million sq ft, which is 17% less than 2009. “This is mainly due to the cautious approach adopted by developers in order to control the high vacancy of approximately 20% in the market”.
The revival in demand in 2010 and controlled supply of projects have helped to tame the vacancy level currently estimated to be 16-17%, the consultant said.
On rentals, C&W said most micromarkets witnessed about 5-15% appreciation over last year. However, the last quarter of 2010 has seen rentals stabilising across locations.