Commercial real estate slowdown? Office space leasing down 2% in H1 of 2017

Office space leasing fell 2 per cent in January-June 2017 to 18.9 million sq ft in seven top cities but demand is expected to remain steady in the second half, according to property consultant Colliers.

"The gross office take-up amounted to 9.6 million sq ft in Q2 2017 representing a nominal 2 per cent increase quarter- on-quarter from 9.3 million sq ft," Colliers India said in a statement.

Total office absorption in H1 2017 stands at 18.9 million sq ft, marginally down by 2 per cent from the corresponding period of last year, it added.

Colliers tracks seven office markets — Delhi-NCR, Mumbai, Chennai, Kolkata, Bengaluru, Hyderabad and Pune.

"Despite recent layoffs' alert by technology companies due to automation and changing technology, we expect the commercial market to remain resilient backed by sustained expansion plans of the major occupiers," said Surabhi Arora, Senior Associate Director, Research, Colliers India.

On GST implementation, she said it would result in marginal increase in occupancy costs but there would be no adverse impact on demand.

"The influence of recent adoption of the goods and services tax (GST) and increasing interests of investors in warehousing sector should be noticeable events to watch out for in H2 2017," Arora said.