Bangalore The Highest Commercial Space Absorption Of India

Last year we have seen the rise in absorption of Commercial property in Bangalore by 8% where previous year at 35.5 million sq ft.across the country

. There is a decline of over 20% in total supply entering into the real estate market in 2011 over last year.

Bangalore continued to top the charts with the highest absorption of commercial property in India at 11.53 million sq ft. with additional pre-commitments of 5 million sq ft next year. 2011 has seen some interesting patterns of growth and improvement over the previous year. The first half of 2011 was witnessing to dynamic leasing activities and the second half was more restrained.

Highlighting the growing domestic need for economic push seem to have has an effect that the fact of absorption could have been higher had several corporations not deferred their expansion plans in the second half of the year.

The IT/ITes and BFSI sector which are the key demand drivers and have the significant share amount of absorption having the clear slowdown in expansion plans thereby affecting the demand. On the other hand the Non IT absorption is registered at 30% growth adding to the positive demand.

Despite the impending uncertainty on the back of weak global cues the growth in emerging economies is still expected to be 7% or more continues to drive the absorption in difficult times. Total commercial property supply was recorded at 34.63 million sq ft which was delivered in the first two quarters of the year.

SEZ projects account for nearly 25% of the total supply across major cities barring NCR and Ahmadabad. Attracted substantial pre-commitments across all cities SEZs trend is likely to continue into 2012.

In Bangalore the peripheral micro market of Whitefield and Electronic City accounted for a significant share of the total absorption of commercial property in Bangalore approximately 5 million sq ft. India's growth story remains intact where Bangalore's MNC's and corporates like HSBC, Mercedes Benz, GE among others are the companies continuing their expansion programmers with a thrust on striking a bargain deal in the process.

According to market source Bangalore's overall absorption in commercial property for the year is likely to touch 9-10 million sq ft. For many years Bangalore will continue to retain its dominant role as the city with the largest absorption of commercial property in the country.

Corporate have started evaluating tier II cities to attract local talents via-a-vis suburbs in tier I cities in particular for data processing jobs expected to keep the high end jobs in tier I cities. In Bangalore there are not many ready to move-in commercial property space in areas like Outer Ring Road and North Bangalore.

Corporates are also scouting for other locations due to limited commercial property space availability in order to meet their future requirements. If the current trend is any indication then the demand for BTS format may inch up next year as there is no supply in the desired locations for corporate. In fact , Whitefield is becoming the preferred Hub for commercial space occupiers. According to relators most of the corporate are now favoring Whitefield due to the inherent cost advantages while setting up operation in the area.

by: lokeshmanu24

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