Office rentals falling in Indian cities: ReportJanuary 15th, 2009 - 9:58 pm ICT by IANS
New Delhi, Jan 15 (IANS) Office space rentals in India’s metros and larger cities have been falling since the last financial year, according to a report released Thursday by global real estate consultancy CB Richard Ellis. The India Office Market View report on office spaces in major cities said vacancy levels have increased and rentals were corrected because of dampened demand.
While the office markets of Chennai recorded the least correction (6 percent) in the third and fourth quarters of 2007-08, the maximum (30 percent) was experienced in the Extended Business District of Mumbai.
In terms of rental values, the peripheral markets of Gurgaon and Noida witnessed a drop of approximately 12 percent and 16 percent respectively in the fourth quarter of 2007-08, as compared to the previous quarter.
The NCR Real Estate Market is fast changing from a “sellers’ market” to a “buyers’ market”, it said, adding that India’s technology hub Bangalore witnessed about 30 percent vacancy with IT firms slowing down fresh acquisition plans.
“The office space demand which moderated in the first two quarters, tapered off by the end of the year. Fresh commitments and pre-leasing of under-construction developments underwent a noticeable drop a fact stemming from the US financial crisis,” the report said.
Observed Anshuman Magazine, chairman and managing director of CB Richard Ellis (South Asia): “The real estate sector in India has mirrored the global economic conditions that are unfurling. The next few months are likely to be a time of subdued demand.”