New Delhi: Delhi-NCR witnessed a 57 percent decline in the office space absorption in the first quarter this year due to delay in decision making by corporates, according to property consultant Cushman & Wakefield.
However, the consultant said office space absorption (leasing) is expected to pick up on strong demand in the coming quarters.
Net absorption of office space in Delhi-NCR fell to 6.26 lakh sq ft during January-March from 14.61 lakh sq ft in the year-ago period.
"NCR has registered a significant decline in office space net absorption at 60 percent in Q1 2015 as against the same time last year, largely due to the result of some delays in decision making as demand still remains strong from occupiers given that a number of transactions are in the pipeline," Cushman & Wakefield said in a statement.
However, besides NCR, the net office space leasing in India's other top eight cities rose by 35 percent to 7.97 million sq ft in January-March 2015 from 5.91 million sq ft in the year-ago period.
These eight cities are -- Ahmedabad, Bengaluru, Chennai, Delhi-NCR, Hyderabad, Kolkata, Mumbai and Pune.
"Chennai and Bengaluru saw the highest increase in net absorption as demand from IT-ITES companies remain strongest for the southern cities in the improving business environment," C&W said.
Bengaluru witnessed over six-fold jump in the absorption of office space at 3.2 million sq ft during January-March period of 2015 from mere 5,31,000 sq ft in the same period last year.
Other markets that saw significant decline in net absorption were Ahmedabad (-75 percent) and Hyderabad (-37 percent).
"We expect to see a growth in the office space absorption of approximately 15 percent by the end of 2015. Basis the same, we expect total net absorption to be recorded between 36 ?37 million sq ft at the end of 2015, majority of the demand coming from the IT/ITeS and the BFSI sector in key markets of Bangalore, Delhi-NCR and Mumbai," C&W South Asia Executive Managing Director Sanjay Dutt said.
Net absorption/net leasing refers to the new/additional occupation activity and includes only the incremental new space take-up in instances of relocations and expansion from within the city. It does not include lease renewals and relocations to same sized office spaces.
On supply front, C&W said it declined by 2 percent in the first quarter of 2015 at 7.4 million sq ft from the year-ago period.
