Office space sees uptick in absorption in Q1 2016: Colliers

HYDERABAD: Office space absorption saw a healthy uptick of over 11% in first quarter of this year from the previous quarter on the back of positive economic growth coupled with increasing business confidence index, reports real estate services agency Colliers International.

The market witnessed office space absorption of 8.8 million sft in the first quarter of 2016 with Bengaluru taking the lion’s share with 33% followed by NCR (Delhi, Gurgaon and Noida), Hyderabad, Pune and Mumbai.

Major transactions this quarter included 6.2 lakh sft leased by Infosys in Pune, 5 lakh sft by HP in Bengaluru and 1.5 lakh sft by EXL in Noida. Besides this, RMZ Corp has acquired Essar Group’s Equinox Business Park located at Bandra-Kurla Complex (BKC) in Mumbai for approximately Rs 2,400 crore.

Hyderabad remained the bright spot in the industry with major tech companies announcing huge investments to bolster their expanding network of technology development centres and facilities in the city.

Amazon recently leased 3.5 lakh sft space in Raheja Mindspace in Hitech city. Apple Inc. is also opening its first technology centre in the city leasing 2.5 lakh sft of space in Tishman Speyer’s Waverock SEZ in Hyderabad.

Grade A rents remained stable in both central and secondary business districts across the nine cities. However, with limited new launches, the office construction pipeline increased slightly from Q4 of last year. Vacancy levels in most major cities declined due to limited new supply addition.