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HYDERABAD: In a clear indicator that IT & ITeS as well as non-IT companies continue to gobble up the office space in Hyderabad, the city has bucked the trend of declining office space leasing activity across the country during the first half of 2012 caused by a slowdown in demand for IT/ITeS biggies.
A study by global real estate consultancy firm CW has found that office space absorption in Hyderabad grew 5% at a time when the overall office space absorption across top eight cities of the country plummeted 21% to 13.4 million sft as compared to 16.9 million sft in the first half of 2011. This steep drop in office space absorption for the January-June 2012 period was led by top IT/ITeS hubs of Bangalore, NCR, Chennai and Pune, while office space absorption went up in cities like Hyderabad, Mumbai, Kolkata and Ahmedabad during the same period thanks to demand for office space.
In Hyderabad, office space absorption shot up 5% from 1.63 million sft during the first half of 2011 to 1.71 million sft during the first half of 2012. In stark contrast, other IT/ITeS hubs saw a steep fall in office space leasing activities. While absorption in NCR plunged 53% to 1.35 million sft during the first half of 2012 from 2.9 million sft in the January-June 2011 period, that in Bangalore plummeted 45% to 3.01 million sft from 5.45 million sft. In Chennai too, office space absorption dropped 12% to 1.72 million sft from 1.96 million sft and that in Pune fell 5% to 1.39 million sft from 1.46 million sft.
This, according to CW, was because though overall leasing by IT/ITeS majors remained subdued across the country, Hyderabad continued to attract attention from non-IT companies as well. “The first half of the year has seen decline in overall office space leasing in the country which is indicative of a cautious approach from the occupiers given the downward revision on the GDP outlook for the year. It indicates that occupiers are clearly looking at taking up space once business requirements are clarified and frozen. The demand from IT&ITeS sector is likely to remain subdued resulting in low leasing activity. However there were some pent-up demand from some sectors such as BFSI which were absorbed especially after a revision in RBI policies,” Sanjay Dutt, executive managing director ( South Asia), CW said.
In Hyderabad, Dutt said, the growth trend of non-IT absorption had continued to remain buoyant with several companies involved in engineering, professional services and technical services taking up space mainly in the suburban, CBD (central business district) and off-CBD micro markets. Interestingly, in Hyderabad, the IT hubs of Madhapur, Gachibowli, Nanakramguda, Manikonda and Raidurg, classified by CW as suburban markets, led the office space absorption in Hyderabad with a total 9.87 lakh sft being absorbed in January-June 2012 period indicating that IT and ITeS companies continue to ramp up their presence in the city.
According to the realty consultancy firm, off-CBD markets like Begumpet, Somajiguda, Raj Bhavan Road and SP Road accounted for the second biggest chunk of office space leasing during the period with a total 3 lakh sft space being absorbed, followed by CBD markets like Banjara Hills Road No 1, 2, 10 and 12, with a total absorption of 1.72 lakh sft and peripheral markets like Pocharam and Shamshabad with a total absorption of 1.34 lakh sft office space.
Via : TOI