Tag Archives: ITES

Bangalore Sees Lower Office Space Absorption as IT Demand Falls

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Compared to 2011, the office space absorption has fallen in Bangalore. Experts opine that the situation was the result of weaker demand from the IT and ITeS sectors.
Office space absorption in Bangalore fell due to the lower demand from IT and ITeS sectors.

Office space absorption in Bangalore fell due to the lower demand from IT and ITeS sectors.

Real estate experts said that the office space absorption in Bangalore has been dropped as the IT (Information Technology) and ITeS (IT enabled Services) did not raise much demand. The reports show that the office space absorption has dropped by 24% last year.

Cushman & Wakefield, a global real estate consultancy, reported that in 2012 nearly 7.3 million sq. ft. of office space was absorbed. This rate of absorption is very lower to the 9.59 million sq. ft. of 2011. If the IT and ITeS sectors had shared nearly three fourth of the total supply in 2011, in 2012 their absorption is just above two fourth of total supply. Continue reading →

Study says that MNCs surpass Indian firms in office space uptake.

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With bearish sentiment affecting corporate expansion plans in the country’s financial capital, there has been a steep decline in the commercial real estate taken up by Indian companies. In contrast, multinational companies (MNCs) have picked up considerable office space here.

The latest report by property advisor DTZ comparing the trends in the first quarter of 2012 to the same period last year shows a noticeable change in the profile of the commercial real estate occupier in Mumbai. Between January and March 2012, Indian corporate firms account for 29 per cent of occupiers of new commercial realty space in the city. This is a sharp fall from the 71 per cent market share of new space that these corporates picked up in the corresponding period in 2011.

In comparison, US- and Europe-based corporates were responsible for taking up 5 and 18 per cent of the space in the first quarter of 2011 respectively. In the same period this year, their market share has gone up by 32 and 23 per cent respectively.

According to Rohit Kumar, DTZ research head, an analysis of quarter-on-quarter and year-on-year office space take-up highlights the fact that relative market share of MNCs based out of USA and Europe has increased significantly while that of their Indian counterparts has dropped. “Be it IT, ITES or Banking, Financial Services and Insurance (BSFI), the MNCs find India relatively cheaper in terms of labour and real estate. On the other hand, despite the positive growth signals from the US and Europe, Indian corporates are more conservative, fearing the return of recession,” said Kumar.

Bengaluru has Impact Of IT, ITES on Real Estate.

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Advantages like available skilled workforce, a high quality of living and better career prospects are at Bengaluru but factors like the cost of real estate and ready access to international destinations also matters a lot.

Services such as call centers, transcription, data processing, online education, etc are included in ITES which has made a huge impact on international workflow into India, mainly because of low communication costs and the financial sense behind outsourcing non-core activities. It is an obvious advantage for any modern city to have a significant presence of this industry, which creates white-collar, high-profile jobs and has remarkable effects on its real estate market.

Commercial developments in the city have been done by the private sector and the Bangalore Development Authority (BDA), which controls the growth process of the city.

The city’s commercial market has three spatial limits – central business district (CBD), suburban and peripheral. Bengaluru has no true concept of a CBD which resulted in business growth from MG Road to other main roads such as Residency Road, Richmond Road and Brigade Road, Infantry Road and Cunningham Road.

Some of the prominent streets in prime off-CBD areas in Bengaluru are Commercial Street, Infantry Road, Cunningham Road, Richmond Road, Residency Road, Millers Road, St Mark’s Road, Vittal Mallya Road and Lavelle Road. The advantages they offer are reduced congestion, the availability of space and proximity to the City Centre.

Bengaluru suburbs are classified as areas near to Airport Road, Koramangala, Indira Nagar and Jaya Nagar. The peripheral areas consist of Bellary Road, Whitefield and Bannerghatta Road.