India's commercial real Estate: 35 per cent dip in absorption


There has been a 35 per cent dip in absorption in commercial estate in the top 7 Indian cities the first half of 2012 as compared to the first half of 2011.

According to a study conducted by Jones Lang LaSalle, India, "NCR-Delhi, showed the maximum dip in absorption at 21 per cent, an increase from the 18% figure it recorded in first half of 2011. It was followed by Mumbai, which recorded 19 % of the absorption as compared to 32 per cent a year ago,' 

Mr. Hariharan Ganesan, Senior Manager - Research & REIS, Jones Lang LaSalle India said,  "Hyderabad & Kolkata together increased their total absorption due to the penetration of good quality office buildings with moderate occupancy rates over the past few quarters," says .

Highlights of Jones Lang LaSalle, India Survey..!

^ The primary reason for this activity was healthy pre-commitments among the new completions in NCR - Delhi that were better than those in Mumbai.

^ On average, the share of net absorption from the new completions during first half of 2012 in Mumbai and NCR - Delhi has remained about 60%, as opposed to the national average of 29%.

^ Supply fell by 52% during the period. As a result, contrary to the trend of first half of 2011, on a national level, demand for office space in first half of 2012 exceeded the office space supplied. However, this trend varied from city to city.

^ Backed by relatively healthy leasing activity, Bangalore, Chennai & Pune together accounted for about 45% of the pan India absorption in the reporting period, an increase from the 42 per cent recorded in the previous year.

^ Supply overhang will persist amid moderate pre-commitment levels in near term supply. Only 23 per cent of the annual supply forecast for 2012 is operational in the top 7 cities of India as at end June, 2012 . This shows the impact slowing demand has had on the construction progress of the supply expected in the near term.
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