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Bangalore recorded the highest office space demand in the first quarter of 2012 at 3.6 million sq ft.
A DTZ Research report said that the cumulative absorption of space across seven cities, however, dropped 14 per cent on a sequential basis in the period. Cautious sentiments prevailed in the market as domestic macro economic indicators remained uninspiring while contrary to expectations, no drop in benchmark interest rates were affected, said the report.
According to DTZ CEO, Mr Anshul Jain, policy-level paralysis is taking a toll on the real estate sector. “Occupiers are holding on to their decisions to take up commercial A-grade office space and are likely to continue with their present stance till the third quarter of CY 2012,” he said.
Bangalore saw a demand of 3.6 million sq ft, followed by Mumbai at 1.2 million sq ft. IT firms continued to drive the demand across the country, with Mumbai being an exception as the BFSI sector remained the largest occupier segment in the city.
The report said that project completions in the period grew by 30 per cent sequentially, as pace of construction picked up in Mumbai, Bangalore and Chennai.
A turnaround is expected in October, said Mr Jain, adding that rentals will remain stable or increase marginally till then.
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