Office market is set to absorb about 4.5 million sq ft space during the year while about 10 million sq ft of additional area is coming up over the next three years, according to real estate consultancy company Jones Lang Lasalle.

Addressing a select group of newspersons here, Anuj Puri, Chairman and Country Head of Jones Lang Lasalle, said that the demand was driven mainly by the IT sector contrary to the general perception of agitation impacting growth.

The demand in Hyderabad is similar to that seen in Pune which is also expected to absorb about 4.5 lakh sq ft during the year.

In two large transactions, Oracle had taken up about 5,00,000 lakh sq ft. of office space and Amazon about 5,40,000 sq ft. The demand continues to come from existing companies expanding business rather than new ones coming in, according to Sandip Patnaik, Managing Director, Hyderabad, JLL.

Providing office market demand insights, the officials said that overall vacancy rates have been in the range of 8.5 per cent in the commercial asset class over the last two-three years. The current vacancy is about 5.7 per cent.

The IT hub of Hitec City continued to remain the most preferred sub-market with highest net absorption. Meanwhile, Gachibowli is also witnessing increased enquiries from occupiers.

The city has limited special economic zone space available for leasing in the prime markets of Hitec City and Gachibowli, both IT hubs.

The retail market has vacancy of 3.6 per cent of the available stock of 2.7 million sq.ft.

In the residential market, there is supply of about 30,000 Grade A residential units which were added during 2012. The vacancy rate is about 57 per cent as of the first quarter 2013. The capital value for residential projects ranges between Rs 2800-12,000 per sq ft.

The rebounding consumer confidence has improved the sales in residential projects in the city, they said.

rishikumar.vundi@thehindu.co.in

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