Demand for space in commercial real estate sector is reviving after the earlier setbacks in the primary quarters of the year 2012. Seven prominent commercial hubs of India showed a greater pace of growth in the third quarter of 2012. The third quarter which longs from July-to-September quarter, witnessed an A-Grade office space absorption by the major commercial real estate hubs on India.
Total office space absorption is estimated 7.6 million sq. ft. in the third quarter. Among Mumbai, Bangalore, Chennai, Hyderabad, Delhi-NCR, Pune and Kolkata, the seven major real estate commercial hubs Bangalore stood in the front. This is well ahead to the previous quarter’s office space absorption of 5.9 million sq. ft. April-to-June quarter thus showed a negative growth in the commercial real estate sector.
As per the report of DTZ, a well- known global real estate consultancy firm, Bangalore is on the driving seat of this growth. Bangalore produced a 3 million sq. ft. office space absorption in the period of July-to-September. On a sequential basis, Bangalore is reported to have growth rate of 67%. Hyderabad stood second to Bangalore with a growth rate of 56% in the commercial real estate office space demand.
Mumbai attained a record 117% increase at 0.91 million sq. ft. This was mainly led by demand from the banking and financial services. Pharmaceutical sector also contributed to the growth. This increase is comparatively lower to the previous year’s demand of 1.03 million sq. ft.
India’s entire supply of commercial space, as a whole, had a sequential growth rate of 188%. Mumbai received the maximum growth at 449%. A sequential fall by 28 % was seen in the Delhi-NCR region. This was due to the fact that the consulting and manufacturing companies did not demand so much of office space.
DTZ India’s chief executive officer Mr. Anshul Jain spoke of their hope in economy which will uptrend the real estate markets despite their downfall in the first two quarters. The group said that it was sure of the bouncing back of commercial real estate with a higher growth rate.
The commercial real estate market renting did not show up any sign of growth. The rental real estate markets stood stable across the country in the period spanning from July-to-August.
Bangalore Outer Ring Road region and Central Business District (CBD) of Kolkata remained exception to it. Kolkata CBD witnessed a 5% growth whereas Outer Ring Road of Bangalore witnessed a mere 4% of growth. Higher pre-leasing activity and lower availability of A- Grade office space in the area led real estate commercial rental area to the increase.