Office leasing in Q3 up 2% in 8 cities at 10.4 millionn sq ft: CBRE

New Delhi: Office space leasing increased marginally during July-September period in eight major cities at 10.4 million sq ft on higher demand from corporates from Europe, Middle East and Africa, according to property consultant CBRE.

"Leasing activity remained strong during the quarter, with office space take-up rising marginally by 2 per cent quarter-on-quarter to touch 10.4 million sq ft," CBRE said in its report 'India Office Q3 2017'.

The eight major cities covered in this report are Delhi- NCR, Mumbai, Kolkata, Chennai, Hyderabad, Bengaluru, Pune and Kochi.

The consultant noted that there was increased interest from EMEA (Europe, Middle East, Africa) corporates for India and their share of office space leasing rose to 14 per cent during July-September period from 9 per cent in the previous quarter.

"India's prime office market is evolving at a rapid pace. Occupier strategies continue to focus on consolidation/ expansion as well as cost and greater flexibility of office space," said Anshuman Magazine, Chairman India and South- East Asia, CBRE.

The co-working and shared office space formats are also gaining momentum and influencing the market to some extent, he added.

"While demand for traditional office space will continue to dominate the segment, it will have to make allowance for newer formats that are slowly gaining prominence and absorbing a part of the overall pie," Magazine said.

As per the report, Bengaluru, Mumbai and Delhi-NCR led quarterly leasing activity with a share of more than 60 per cent.

"Apart from Bengaluru, Hyderabad and Kolkata, all the other cities witnessed a rise in space take-up on a q-o-q basis," the report said.

IT/ITeS sector continued to drive office space leasing with about 34 per cent share in the overall space leased during the quarter.

The share of other sectors such as engineering and manufacturing (19 per cent) and banking, financial services and insurance (10 per cent) fell on a quarterly basis.

Co-working operators remained active, with both global and domestic players expanding their operations in Mumbai, Bengaluru, Delhi NCR and Pune, the consultant said.

On transaction size, CBRE said that the bulk of leasing was for less than 50,000 sq ft during the third quarter of 2017 calendar year.

Small-sized transactions (less than 10,000 sq ft) comprised about 40 per cent of all the transactions reported during the quarter, while half of the deals concluded ranging between 10,000?50,000 sq ft.

The share of large-sized deals (greater than one lakh sq ft) remained at 5 per cent, same as the previous quarter.

During the January-September period, office space leasing, however, declined marginally to 29 million sq ft compared to the year-ago period.