Chennai office market absorption drops marginally in Q1 FY 2013

BANGALORE: Demand for office space in Chennai has dropped marginally in the first quarter of the current financial year as corporate remain cautious due to ongoing economic crisis in the global markets.

As per Knight Frank, the city recorded a total absorption of 1.10 million sft in the April - June quarter of 2012 as compared to 1.20 million sft during the same period last year.

The share of IT/ITes sector, which contributed 75% of the total office space demand in the first of last fiscal slipped to 48% in Q1 of FY 2013.

"This decline in the IT/ ITeS sector absorption may be attributed primarily to the inability of the economies of the North American and European countries to revive as per expectations.

Although the IT/ITeS sector continues to be affected by economic constraints, with the market reflecting cautious optimism, leasing levels should remain firm and not decline drastically," says Knight Frank.

Some key transactions in Chennai in Q1 FY 2013:

Building	Occupier	Location	Approx Area (sq. ft)
Ascendas IT Park	Williams LEA	Taramani	13,800
DLF IT Park	L & T	Manapakkam	74,000
SP InfoCIty	Citibank	Perungudi	18,240
Prestige Palladium	Emirates	Greams Road	8,000
Ambit IT Park	Dorschel	Ambattur	35,000
DLF IT Park	Virtusa	Manapakkam	72,000

Source: Knight Frank Research