Office Space Absorption Shrinks in Bangalore

office-space-bangalore
Bangalore owes its multi-fold economic growth since 1990s to IT industry. The wealth created by the new industry has had a multiplier effect leading to real-estate boom, a flourishing retail and leisure entertainment industry. This has transformed bangalore from a peaceful pensioners paradise to a global technology hub. This trend is expected to continue to follow an upward path in the years to come.

However, the recent Euro crisis and lower than expected growth in US did dent the IT growth forecast in India. Most IT companies have revised their expansion plans and moved on to consolidation mode. The commercial property absorption in Bangalore has dropped over 20% in 2012, compared to 2011. The IT sector which consumes over 80% of office space has absorbed only 60% of the supply in 2012. However, other sectors like Banking and Manufacturing upped their absorption in 2012 by 6%.

On the brighter side, Bangalore is still the best performer in office space absorption in the country. Cities like Chennai have seen more than 50% fall and Mumbai over 23%.