Amid slowdown fears, supply of office space in top eight cities has declined by over 20% to 34.01 million sq ft in 2011, global realty consultant Cushman & Wakefield said.
According to a study, the consultant said the cities had witnessed a supply of 43.15 million sq ft of office space in 2010.
"The decline in supply as against the anticipated can be attributed to a large pipeline of projects under construction coupled with lower pre-commitments in the latter part of the year, based on a fear of uncertain economic scenario in the next 12-24 months," C&W said.
This has made developers adopt a cautious approach and forced them to guard themselves against possible erosion of rents, it added.
C&W, however, said the eight cities witnessed a rise of 6.5% in total commercial space absorption at 35.55 million sq ft as against 33.38 million sq ft in 2010.
Rentals across most micro markets remained stable for the most part of 2011.
However, there were a few exceptions such as Mumbai central business district, where rentals dropped by 14%, while some areas in Bangalore, rentals increased by 11%.
"The projected supply of 51 million sq ft in the next year is likely to be controlled by the developers, who may alter the pace of construction to align with demand fluctuations. This may keep rentals under pressure, leading to flat trends through most of the year," C&W India Managing Director Anurag Mathur said.
