Office space absorption increased by 28 per cent to 32.5 million sq ft during last year in the country's eight major cities on the back of improved business sentiments post-election, according to property consultant Cushman & Wakefield.
Office absorption in these eight cities - Ahmedabad, Bengaluru, Chennai, Delhi-NCR, Hyderabad, Kolkata, Mumbai and Pune - stood at 25.35 million sq ft during 2013.
"The top eight cities of India recorded overall net office space absorption of 32.5 million sq ft in 2014. The overall net absorption increased 28 per cent year-on-year," C&W said in a report.
Ahmedabad witnessed the highest increase of 163 per cent in net absorption, followed by Bengaluru with 87 per cent rise. Office markets of Hyderabad, Delhi-NCR and Chennai also witnessed upswing in the absorption of 50 per cent, 20 per cent and 15 per cent, respectively.
However, the consultant said that Kolkata saw a decline of 33 per cent in overall net absorption while Mumbai and Pune recorded 6 per cent and 4 per cent decline respectively. In terms of area, Bengaluru outpaced other cities by registering 8.9 million sq ft of net absorption during 2014.
Delhi-NCR recorded 6.2 million sq ft of net absorption followed by Mumbai (4.5 million sq ft) and Hyderabad (4.4 million sq ft). Office space absorption in Ahmedabad stood at 1.5 million sq ft.
Commenting on the report, C&W Executive MD South Asia Sanjay Dutt said: "With a stable single party government coming into power by the mid of 2014, overall business sentiments have improved with the office market seeing significant levels activities in the second half of 2014. Many companies began executing their growth strategies with greater confidence leading to improvement in demand for office spaces."
Dutt expected the demand for office to remain robust in the next two years as many companies continue to relocate and adopt workplace transformation strategies.
"Pick-up in hiring and growth in demand for new developments will lead to an overall improvement in absorption volumes. Rentals will continue to remain largely stable due to likely high supply addition expected in 2015, which will in-turn help many markets remain occupier favorable in the short term," he added. On office supply during 2014, C&W said it increased by 9 per cent year-on-year to 36.6 million sq ft.
Bengaluru recorded the highest supply addition of 9.4 million sq ft, registering a 67 per cent increase in yearly supply. It was followed by Delhi-NCR (8.7 million sq ft) and Mumbai (5.9 million sq ft).