IT sector sees decline in use of commercial office space in Chennai

CHENNAI: Due to the uncertain global market conditions, the Information Technology sector has witnessed a decline on the use of commercial office space in Chennai, says a study.

"Chennai office market is predominantly covered by the IT and IT-enabled services sector. In the first quarter of 2011-12, out of the total 1.20 million square foot absorbed, 75 per cent was contributed from the IT and ITeS sector", a study conducted by Knight Frank India said.

"However, in the first quarter of this financial year, share of IT and ITeS sector declined to 48 per cent due to the uncertain global market conditions," it said.

Sectors like media, telecom, aviation, automobile and consulting firms together contributed about 13 per cent in first quarter of 2011-12 to 22 per cent in first quarter of this financial year indicating the emergence of other sectors absorbing the commercial space market, it said.

On the outlook for this financial year, the study said the Chennai commercial property space has moved from an absolutely IT and ITeS sector, to a more diversified occupier base with the newer sectors.

The banking, finance and services industry (BFSI) vertical also strengthened its hold in the commercial space with its share increasing from six per cent in the first quarter of 2011-12 to eight per cent in the first quarter of this financial year, the study said.