Commercial projects in Bangalore are facing a tough time
Realty sector in Bangalore is facing a tough time as IT industry demand goes down. The absorption rate of office spaces are dropping across India’s seven largest cities.
Uncertain economic conditions coupled with the euro zone crisis leads to this situation in the Indian real estate sector.
Demand from IT/ITES sector has dropped from the peak of 68% in 2005 to 35% at present due to increasing cost pressures faced by these firms. Growth expectations of India’s IT sector have been lukewarm so far.
Currently, demand for Grade A office space is driven by foreign companies from the US and European Union, which contribute a major share of lease transactions across major cities in the country.
There has been no escalation in realty budget as companies look to reduce operating costs.
IT/ ITeS firms have reduced their real estate budget by 5 to 8 percent this year as they wait for renewal of contract from clients before they can take on additional floor space.
Companies are also staggering occupancy time line and do not want to occupy large space at one go.
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Bangalore: Not a preferable place for MNC’s anymore
Source: Times of India
absorption rate of office spaces, additional floor space, Indian real estate, real estate budget, Realty sector in Bangalore
