Being an important IT- Hub, Bangalore always depends on the IT and ITeS sectors for its growth and development. Facing weak demand from these sectors, Bangalore now witnesses lower office space absorption.
There has never been a doubt for anyone about the close relation of Bangalore with the IT and ITeS sectors. This is comparatively great in matters related to office space absorption in the city. The office space absorption always reached heights whenever these sectors have performed well.
On the other hand when the demand from these sectors is weak, then the office space absorption also has been weak in Bangalore. This year there is a weak office space absorption by the IT and ITeS sectors in the city. As a result there has been a steep fall in the absorption rate as well.
Real estate experts report that the city, compared to last year, has experienced a 24% -fall in office space absorption. The Cushman & Wakefield report states that in 2012 only 7.3 million sq. ft. was absorbed. In the year 2011, nearly 9.59 million sq. ft. of office space was absorbed.
The global real estate consultancy firm further reported that in 2011, IT and ITeS sectors remain responsible for majority of the absorption. These sectors claimed nearly 90 percent of the total absorption while in 2012 this absorption rate is limited to 50 percent.
Knight Frank also reported similar. Mr. Avinash Rao of Knight Frank stated that the global economic crises along with sluggish US economy had made the IT and ITeS sectors very cautious. Due to these global features, IT and ITeS sectors have become highly watchful.
Sluggishness existed in IT and ITeS sectors around the world, DTZ India’s Mr. Satish B N has reported. The phenomenon was neither confined to India nor was particular to Bangalore alone. However, there was a steady improvement in the demand from other sectors. Due to this, Bangalore did not experience a very sharp fall in the office space absorption.