Friday, December 15, 2006

IT, ITeS drive demand for office space in Bangalore

Sujit John | Times News Network

Bangalore: Demand for commercial property space in Bangalore this year remains strong and the city is likely to end this year too as the Indian city with the highest office space absorption. But the place that has seen the most remarkable growth in this segment is the National Capital Region (NCR).

As per office space absorption estimates made by property consultancy DTZ Debenham Tie Leung for the first nine months of 2006, Bangalore has crossed 8.9 million sq ft, an increase of 25% as compared to 7.1 mn sq ft in the same period of 2005. Total absorption for the city is expected to cross 11 mn sq ft by the end of the year. Last year it was 9.5 mn sq ft, making it the city with the third highest office space absorption in the world, after Tokyo and London.

But it's Delhi, or rather the NCR (including Gurgaon and Noida), that stands out this year. DTZ estimates NCR's absorption at 6.36 mn sq ft for the first nine months, and expects this to be 8 mn sq ft for the whole year. That's nearly 3.5 times the absorption in 2005 (2.36 mn sq ft). In both Bangalore and NCR, the office market absorption continues to be driven by the IT and ITeS sectors. In Bangalore, they account for over 70% of the space absorbed, and in NCR, the figure is about 59%. A notable change in NCR is the growing share of Noida in absorption. In the third quarter of this year, Noida accounted for almost 48% of the total absorption, against the 27% it had in the first two quarters. Gurgaon seems to be losing ground.