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| Demand for office space rises by 19% in Q2: report |
| Press Trust of India / New Delhi Oct 28, 2009, 13:50 IST |
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Vacant office spaces have seen demand for them rise by 19 per cent during the last quarter amid signs of economic recovery, although the same weakened in the National Capital Region on hopes of a further drop in rentals, a report has said.
According to a latest report by global realty consultant Cushman & Wakefield (C&W), the average demand in India's eight major cities rose by 19 per cent at 6.7 million sq ft during July-September period over the previous quarter.
"Bangalore witnessed the highest demand in the quarter with 2.3 million sq ft followed by Mumbai at 1.2 million sq ft and Chennai at 0.98 million sq ft," C&W said.
However, demand in the NCR region was down by 30 per cent at 0.66 million sq ft from the previous quarter, it added.
C&W attributed the decline in demand to "subdued interest from the corporate sector in anticipation of further decline in values along with shelving of their expansion plans".
The report said the total supply during the last quarter was much more than demand and was estimated at about 15.9 million sq ft, which was led by Mumbai with 3.73 million sq ft. NCR and Kolkata followed with 2.26 million sq ft and 1.7 million sq ft, respectively.
"The gap between supply and demand increased to over 130 per cent (from 50 per cent) in the last quarter, increasing the average vacancy across major cities in India to 17 per cent from the previous quarter's 13-18," the report said.
The consultant observed that rentals in the three-month period declined by up to 13 per cent in these cities.
Chennai witnessed a decline of rentals for office spaces between 8 per cent and 13 per cent. In Hyderabad, the fall in rentals was to the extent of 9-11 per cent, while in Bangalore, it was down by 5-8 per cent.
Although office rentals in Mumbai stabilised, the declining trend continued in the NCR and it was estimated at up to 6 per cent.
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