Office space absorption sluggish in Bangalore

According to a global property services research company DTZ India, Bangalore’s office space absorption has slackened. Across micro-markets, only the central business district (CBD) in and around MG Road in the Garden City saw a marginal increase in absorption. And of these, IT and engineering firms accounted for 50 per cent and 32 per cent of the absorption respectively, followed by minor contributions from companies in consulting, healthcare, telecom and banking financial services and insurance (BFSI) sectors.

In spite of the lower absorption, the overall office space vacancy ratio in the city dropped to 13.2 per cent from 13.8 per cent in the previous quarter, DTZ said. Secondary business districts (SBD) and residential hubs such as Indiranagar, Koramangala etc and peripheral business districts (PBD) along the outer ring road on Hosur road, Sarjapur road and Whitefield area recorded a tightening in vacancy ratios, while the CBD was negatively impacted by continued relocations and consolidations. As for the new office space supply in Q1, it stood at a moderate 0.7 million square feet, on par with the level recorded for the previous quarter.

However, this was a decline of 60 per cent year-on-year. The total amount of Grade A office stock in the city now stands at 94.2 million square feet. On the forthcoming supply for 2013 it stands at 9.6 million square feet, followed by 15 million square feet in 2014.