New office space taken up across the top eight cities was up 58 per cent, at 5.9 million sq ft, between January and March 2014, against a year ago, according to real estate consultancy Cushman & Wakefield. In its latest quarterly report on the office market, the agency, however, said there was a decline in net absorption of around 22 per cent over the last quarter.

The eight cities include NCR, Mumbai, Bangalore, Chennai, Hyderabad, Pune, Kolkata and Ahmedabad.According to Sanjay Dutt, Executive Managing Director, South Asia, Cushman & Wakefield, some of the transactions were spillovers from the last quarter, of deals that could not be completed in time for the year-ending, but there were also significant closures ahead of the elections.

“The steady upward momentum in the first quarter absorption, as compared to same time in other years, is a positive sign. We can see that despite an overall economic condition of wait-and-watch, there has been an uptake of office space,” he said.

He stated that he expects the next few weeks to be moderately slow in terms of uptake of space, as businesses await the results of the General Elections.

Decline in Supply

“Even while occupiers remain conscious of their expansion programmes, we expect a new momentum to start once there has been some concrete result from the General Elections,” he added.

The report added that the total supply of office space in Q1 2014 fell by 8 per cent over the same period last year, at 7.2 million sq ft. Overall vacancy rate across office markets dipped by 0.1 percentage point from Q4 2013, and stood at 18.9 per cent at the end of Q1 2014, it added.

The overall leasing activity recorded was 8.5 million sq ft, also up 58 per cent year on year, indicating that overall leasing activity has kept pace with relocations and consolidations, gaining momentum as occupiers increased operational efficiency from better quality space at lower cost, according to the report.

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