Office space leasing increased by 11 per cent last year to nearly 30 million sq ft in seven major cities on higher demand from corporates looking for expansion, according to real estate company Neo Developers Gurgaon.
These seven cities are - Delhi, Mumbai, Bangalore, Chennai, Pune, Hyderabad and Kolkata. "Close to 30 million sq ft of office space got absorbed in 2014, a 3.0 million sq ft jump in net absorption compared to the previous year," Neo Developers Gurgaon MD said.
Indian office market had the second best year ever (other than 2011) in terms of absorption and the lowest vacancy levels since late 2009, he said. Bengaluru recorded the highest office space absorption in 2014 at 9.39 million sq ft, followed by Mumbai at 5.46 million sq ft and Delhi-NCR at 5.38 million sq ft.
"Bengaluru witnessed a significant 72 per cent year-on-year increase in net absorption in 2014, followed by NCR-Delhi (48 per cent), Hyderabad (41 per cent) and Pune (13 per cent)," the report said. Leasing activities fell in Kolkata (-55 per cent), Chennai (-43 per cent) and Mumbai (-21 per cent).
"A reason for the drop in absorption in Mumbai and Chennai was the lack of availability of suitable office space in the preferred micro-markets," JLL said. Sectors that contributed the highest in terms of leasing were IT-ITeS (35 per cent), BFSI (17 per cent), manufacturing (13 per cent) and consulting business (6 per cent).
"US companies (44 per cent) continued to retain the dominant in share of office space leasing in India in 2014, although its share has decreased by 4 percentage points from the previous year," Neo said. Domestic companies have increased their share to 33 per cent from 31 per cent in the previous year.