Office space leasing up 28% to 10 mn sq ft in Q2

The property consultancy firm noted that corporates are pre-leasing office space to hedge against any rental escalations.

Office space absorption stood at about 8 million sq ft during the first quarter of 2017.

Unlike the housing market which is facing multi-year slowdown, the office segment is doing fairly well.

"Leasing activity remained strong during the quarter, with office space take-up rising by 28 per cent quarter-on- quarter to touch 10 million sq ft," CBRE said in its report 'India Office, Q2 2017'.

The report tracks eight major cities -- Delhi-NCR, Mumbai, Chennai, Kolkata, Bengaluru, Pune, Hyderabad and Kochi.

CBRE noted that Bengaluru and Delhi-NCR continued to remain the key demand drivers, but Hyderabad also witnessed significant activity and overtook Mumbai.

However, office space leasing is down by 4 per cent as compared with the year-ago period.

During the first half of 2017, office space leasing was marginally higher by 2 per cent at about 18 million sq ft compared with the corresponding period of the previous year.

"Despite a dip in our GDP numbers during the March 2017 quarter, India s office market continued to witness sustained activity," said Anshuman Magazine, Chairman India and South-East Asia, CBRE.

India's economic fundamentals remained strong with the implementation of several policy reforms including GST and Real Estate Regulation and Development Act (RERA), he added. According to the report, office leasing continued to be driven by IT/ITeS corporates, with a share of about 36 per cent in the overall absorption.