A new report from real estate consultancy Cushman & Wakefield shows that Chennai witnessed the highest absorption of 1.32 million sq. ft (msf) in the third quarter of 2012 in South India, followed by Bangalore (1.25 msf) and Hyderabad (.50 msf).

Chennai’s office market saw an increase of 35 per cent in total absorption over the previous quarter, marginally overtaking Bangalore.

The majority of office space was absorbed in Taramani, GST Road and Rajiv Gandhi Salai. In the quarter, rental values remained stable, with the exception of a few locations such as T. Nagar, Alwarpet and Guindy that saw marginal appreciation due to increased demand.

Overall, Mumbai absorbed the most office space across India in the same period, recording 2.23 msf, with Chennai coming second.

Said Sanjay Dutt, Executive Managing Director, South Asia, C&W India: “Strategic asset purchases by Indian and multinational companies are on the rise as Indian office space is an attractive investment option at current values. Purchases are limited to strategic assets with potential good rental returns and return on investment in medium to long term period.