Office space leasing up threefold in Delhi-NCR

Leasing of office space in the Delhi-NCR region jumped more than threefold to nearly 1.5 million sq ft during the January-March quarter this year, mainly due to higher absorption by IT firms in Gurgaon, according to a Cushman & Wakefield report.

Net absorption during the first quarter of this calendar year rose sharply to 1.48 million sq ft from 4,63,900 sq ft in the same period of 2013.

"The net absorption at 1.48 million sq ft, was significantly higher compared to the same quarter last year; driven by IT-ITeS occupiers, followed by consulting and engineering," property consultancy firm Cushman & Wakefield said in its latest quarterly office market report.

Net absorption does not include lease renewals and relocations to same sized office space. The majority of the net absorption was observed in the sub-markets of Gurgaon, followed by Delhi.

Additionally, nearly 1 million sq ft of space was pre-committed in the first quarter of 2014 by IT-ITeS and BFSI (banking, financial services and insurance) occupiers in Gurgaon.

However, supply of office space in the NCR region dropped by 22 per cent to 1.72 million sq ft.

The weighted average rental values across submarkets weakened marginally, primarily due to increased availabilities in properties quoting lower rents, C&W said.

Overall vacancy rate at the end of the quarter stood at 25.4 per cent, a marginal decline of 0.2 per centage point. However, unlike Delhi-NCR, the office market in Mumbai saw an overall decline of 8 per cent in net absorption at 7,50,000 sq ft during the first quarter of 2014.

This decline was due to lower expansions by companies and deferment in take-up until the upcoming state and general elections, the consultant said.

Lower demand resulted in weighted average rentals in the central business district declining by 3.7 per cent over the quarter. However, they continued to remain stable at all other locations across the city, it added.

In association with Mail Today