New Delhi:Office space absorption fell by 26 percent to about 5 million sq ft during the first quarter of 2016 in seven major cities of the country, with corporates yet to finalise their real estate plans for the year, property consultant CBRE says.
Delhi and NCR contributed 31 percent to the total office space leasing in the January-March quarter of this year.
"While the first quarter of the year traditionally witnesses muted transaction activity, the overall sentiment among India's corporate space occupiers is optimistic," CMD of CBRE, South Asia Pvt Ltd, Anshuman Magazine said.
India continues to remain one of the global key outsourcing destinations which will improve the momentum going forward, he said in a statement.
About 5 million sq ft of prime office space was absorbed during January-March, a drop of about 26 per cent year-on-year, the CBRE's 'India Office MarketView - Q1, 2016' report said.
The seven cities named in the report are -- Delhi-NCR, Mumbai, Chennai, Kolkata, Bengaluru, Hyderabad and Pune.
"Following a particularly strong fourth quarter of 2015, the first quarter of 2016 was comparatively sluggish as most corporate space occupiers were still strategising their real estate plans for the year, with limited transaction decisions being implemented in the first quarter," CBRE said.
Corporate real estate space take-up during the quarter was led by Delhi-NCR with a share of 31 percent of total transacted space in the leading cities, followed by Mumbai (23 percent) and Bangalore (17 percent).
Almost 47 percent of the leasing activity in the quarter was concentrated in IT developments.
Corporate occupier interest remained concentrated towards prominent micro-markets such as Gurgaon, Thane, Navi Mumbai, Vikhroli, Goregaon and Andheri in Mumbai, Koramangla, Whitefield and Electronic City in Bangalore, IT Corridor in Hyderabad, and Viman Nagar in Pune.
Leading SEZ properties in Chennai, Bangalore, Gurgaon and Noida also witnessed considerable traction, accounting for about 14 percent of total transaction activity.
In terms of supply, about 7 million sq ft of new office space was completed in the quarter with smaller cities such as Kolkata, Hyderabad and Pune accounting for about 68 percent of the total supply released during the quarter.
Pune led project completions, generating about 25 percent of the total supply released during the quarter across leading cities.
Commercial (non-IT) projects accounted for about half of the overall supply that came on-stream in Q1 of 2016.