Hyderabad was always one step behind Chennai in Office Space absorption concerning IT/ITES sectors capitalizing on the good infrastructure of the country. Now things took a new turn around as Chennai found a 12% drop in this market of Office space absorption. Bengaluru, Mumbai, and NCR stand out in the first list as always in this market. Hyderabad has a primary increase in recent years leading Chennai in the Office Space race.
This sudden decline is the result of a lack in providing best office space for the investors mainly focusing on the Infrastructure and the state’s involvement in developing technical hubs.
Many internal politics and financial downside of the state resulted in Investors opting out for Hyderabad and Bengaluru recently. On a huge percentage of 14.6 million square feet of transaction volume, only 4.5 million square feet volume only registered in Chennai’s 2015 reports.
According to the latest data of 2017 end from a big Real Estate concern of Chennai, there has been a 44 to 25 percent of fall in Office Space Absorption scale of IT/ITES sectors of Chennai even though there were a 1.8 million square feet coming online this year.
This supply crunch and dropping vacancy lead to increase in rentals in other hubs as well, followed by an imbalance in total Office space market in South India. In the year 2017 Bengaluru peaked with 11.7 million square feet of Office Space absorption followed by Mumbai with 7.5 million square feet.
Many experts and CEO’s of Chennai based sectors reports about the decline of this market will continue in the city for the following year also and so it is confirmed that Chennai failed to show the overall potential in regaining its old Investors and also in gaining new sector investors.