The global economic slowdown has affected the office space absorption rate in Chennai for the 1Q 2013 ending June which recorded 1.10 mn.sq.ft. compared to1.20 mn.sq.ft. during the corresponding period of 2012 with demand for office space emanating mostly from sectors other than IT/ITeS such as BFSI, media, engineering, automobile and aviation.
For IT/ITeS, the absorption was mainly by the projects in the micro-markets of Manapakkam, Guindy, OMR and Ambattur.
Although Q1 FY 2013 has witnessed lower quantum of office space absorption vis-avis the same quarter last year, there has been an improvement of 22% over the previous quarter (Q4 FY 2012 ending March), that recorded absorption of 0.90 mn.sq.ft. of office space, a report from Knight Frank, a leading real estate research firm, said.
Highlighting the fact that Chennai is no more the IT/ITeS dominated market, the report found that in first quarter last year out of the total 1.20 mn.sq.ft. absorbed, about 75% was by IT/ITeS sector. However, this share has declined to around 48% of the total office space transacted during the first quarter of this fiscal (2012-13). This decline in the IT/ITeS sector absorption may be attributed primarily to the inability of the economies of the North American and European countries to revive as per expectations, the report , prepared by Dr Samantak Das, Director, Research and Advisory Services, Knight Frank India, observed.
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Posted by John Britto
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