Office space absorption likely to touch 32 million sq ft in 2017: Cushman & Wakefield
Office space absorption is set to be stable this year on the back of corporate occupiers’ commitments and the year is expected to end with 32 million sq ft take-up across top eight property markets. Net absorption until September has been recorded at around 18 million sq ft led by Bangalore that has registered highest volume of 4.8 million sq ft, showed a Cushman & Wakefield report.
While Bangalore continued to register the highest volume of transaction, Hyderabad posted the second highest volume of net absorption at 3.2 million sq ft. Information Technology/ IT-enabled services and Banking, Financial Services & Insurance processing businesses have driven 60% growth in Chennai’s absorption levels.
“We have entered the second half of 2017 with a positive outlook, and have seen occupiers absorbing and pre-committing greater volumes of office spaces. Almost 30% of the total net absorption for YTD 2017 took place in the third quarter of the year and going by the previous years’ trends, another 30-35% is expected to be recorded in the last quarter of the year.
“Hence, we expect to see close to 12-14 million sq ft of additional net absorption in Q4 2017. This means that 2017 remains on track to record net absorption similar to last year at around 30-32 million sq ft,” said Anshul Jain, Managing Director, India, Cushman & Wakefield.
Although the first nine months have seen a marginal on-year decline of 7% in absorption across these eight major cities, the trend for office space absorption has been looking positive.
The Chennai market witnessed robust activities in the past few quarters registering a steady quarter-on-quarter growth owing to an increase in interest from occupiers, availability of quality office stock as well as lower rental values