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Despite economic slowdown, IT/ITeS sectors dominate Bangalore office space market with 61 per cent of total transacted space.
Releasing Knight Frank’s Bangalore residential and Commercial market report here on Monday, Samantak Das, chief economist, director-research and advisory services, Knight Frank-India, said, “Amidst economic slowdown, city’s residential market witnessed 22 per cent gain in absorption while it faced a sharp 37 per cent decline in office absorption.”
The first half (January – June) of 2013 witnessed mixed sentiments on the occupancy front and the city’s office market recorded absorption of 3.98 million square feet during H1 2013, depicting a sharp decline of almost 37 per cent over the absorption witnessed in H1 2012.
Das attributed it to subdued economic conditions that led to the delay in occupiers’ decision as they deliberated over expansion plans.
IT/ITeS sectors comprised 61 per cent of the total absorption pie in H1 2013, followed by manufacturing and banking which stood at 10 per cent and 4 per cent respectively.
“While demand may remain under pressure, adequate infrastructure development will garner substantial occupier interest in the near future. Whitefield and Outer Ring Road (ORR) have emerged as preferred locations due to considerable supply and competitive rentals,” said B.N. Satish, Executive Director-South, Knight Frank.
“Of the space absorption share in the city ORR accounted for a whopping 58 per cent in H1 2013, it was just 18 per cent in H1 2012. Suburban markets (SBD) have lost their sheen, witnessing a drop in absorption share from 35 per cent in H1 2012 to just 13 per cent in H1 2013,” he added.
Residential Market
IT/ITeS sectors remain the key demand drivers of the Bangalore residential market. Mid-end (Rs 30-50 lakh) homes seem to be the most popular, with the segment finding the most takers in the current economic environment.
Prices have remained stable owing to an abundant choice of competitively priced products coming up in the suburbs. The Bangalore market continued to rally forward in H1 2013 despite the economy’s struggle to stay afloat.
“The city witnessed the launch of around 28,000 units during H1 2013, signifying a quantum leap of 33 per cent over H1 2012,” said Samantak Das.
“While absorption in cities like Mumbai plunged by 32 per cent in H1 2013 as compared to its corresponding period in 2012, Bangalore scored a gain of 22 per cent,” he added.
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