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Inactivity in office space absorption to end soon

As we all know, India has seen a significant fall in office space absorption in the first quarter, but the experts say that it’s just temporary, and the sluggishness will end in the coming quarters. As India has been a favorite outsourcing destinations for many multinationals, the commercial real estate market will be back to form very soon.

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Inactivity in office space absorption to end soon

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  1. Inactivity in office space absorption ends soon in India

  2. Office space absorption in Q1 2016 • Office space absorption in India saw a significant decline in the first quarter of 2016. • The first quarter registered the absorption of about 5 million sq. ft. • It is actually a drop of 26% when compared to the same quarter (Q1) of the previous year.

  3. Representation of office space absorption and vacancy rate in Q1 2016

  4. According to a popular real estate advisory firm, most of the companies were busy making their plans for the year. • Experts view is clear that they don’t want to give up the commercial real estate market in India. • They say that the market sentiment is still optimistic even after a bit disappointing first quarter. • The reason they give is that, India is one of the favorite outsourcing destination for many multinationals, and it’s true also.

  5. Pictorial representation of outsourcing in Asian countries

  6. Delhi, Mumbai and Bengaluru Leads in Absorption • Delhi NCR accounted for the 31% of the overall office space absorption during the period, followed by Mumbai (contributing 23%) and Bengaluru (17%). • Gurgaon seemed to have evoked a healthy interest among the corporates, while Navi Mumbai, Thane, and Vikhroli saw some prominent activity in Mumbai market. • Similarly, Whitefield, Koramangala and Electronic City are the areas that witnessed major activities in Bengaluru. • The first quarter also saw a few occupiers pre-committing to the space when they are still under construction, mainly in Mumbai and Gurgaon.

  7. Absorption rate in Delhi, Mumbai and Bengaluru

  8. Very Few Large-sized Transactions during the Period • In terms of size, the transactions that are less than 10,000 sq. ft. holds 44% of the share. • The medium sized transactions ranging between 20,000 and 50,000 sq. ft. holds the share of about 19%. • The large-sized transactions (greater than 100,000 sq. ft.) had a very less share of about 6%.

  9. Seeing the reports, the experts have foreseen that the next three quarters of the on-going year are sure to see a rise in leasing activity. • As the corporate firms based out in other countries continue to expand their operations in India, the demand for office space is going to rise and hence the absorption. • But with the developed infrastructure as well as availability of the cost-effective spaces, peripheral locations may also witness increased traction.

  10. To know more visit: http://www.furnishedofficebangalore.com/

  11. Thank You \

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