Real estate leasing dipped across major cities in 2012
Concerns over cost reduction and a cautious approach by occupiers had a negative impact on real estate leasing activity across key markets during 2012. With major corporate houses continuing to review expansion plans and focusing on improving existing space utilisation to control costs, key markets witnessed almost 26 per cent decline in absorption of prime office space.
According to CBRE’s latest report on prime office space ‘India Office Market View Q4, 2012’, the total absorption of prime office space for 2012 was approximately 26 million sq ft as against 35 million sq ft witnessed in 2011. The last quarter of 2012 (October to December) witnessed absorption of around seven million sq ft of office space as compared to about six million sq ft in the previous quarter. About 70 per cent of the transaction activity was dominated by the National Capital Region, Mumbai and Bangalore.
Anshuman Magazine, chairman and managing director of CBRE, South Asia Pvt. Ltd, said the decline in absorption is primarily due to the continuing global and domestic uncertainty in the economy which is a deterrent for corporates in their expansion plans.
Supply levels, too, witnessed a shift with bulk of the supply becoming operational only in the fourth quarter.
According to Cushman & Wakefield survey, residential market across major cities in India witnessed a drop in total number of units launched by approximately 16 per cent previous year. The year 2012 recorded launch of approximately 162,000 new units of residential properties across eight major cities.
With nearly 54,500 new units, NCR constituted a majority (34 per cent) of the total number of new units launched in the year. Pune recorded the second highest number of fresh launches at approximately 24,000 new units, followed closely by Mumbai (22,500 new units approximately) and Chennai (20,800 new units approximately). Bangalore recorded a drop of 50 per cent in the number of new launches over the previous year.