Office rentals up 10 pc during July-Sept: CBRE

Major Indian cities recorded an up to 10 per cent rise in office rentals during July-September, 2010, on increased demand from corporates, according to a real estate consultancy firm.

"Over the past few months, there has been an improvement in commercial leasing activity, primarily due to the revival of expansion and consolidation plans by several corporates," CB Richard Ellis Managing Director Anshuman Magazine said in a release issued today.

The report, based on data collected across seven cities, found that rentals increased the most (10 per cent quarter-on-quarter) in Kolkata's central business district (CBD).
    
The CBDs of other metros, including Mumbai, Delhi and Bangalore, witnessed a 3 to 4 per cent hike in rentals during the July-September period of the current year vis-a-vis the previous quarter.
   
The rentals in Chennai and Hyderabad, however, remained constant when compared to the previous quarter, the report said.
    
"I believe that overall demand for office space would witness an improvement. I also believe that rental increase will remain in check in medium term due to ongoing supply," Magazine said.
    
The report also said that occupiers were actively looking at options in secondary business districts (SBD) in Delhi NCR, Mumbai, Hyderabad and Bangalore, owing to relatively affordable rent and improved infrastructure.
    
It added that there has been a considerable increase in the transaction volume in almost all major metros, including Pune and Kolkata.
    
"Hyderabad is expected to witness higher rentals owing to an increase in demand for commercial office space by the end of this year," the report said.
    
The report also pointed out that prospective tenants might look for projects with maximum value, not only in terms of competitive rentals, but also advantages like better connectivity, parking and other infrastructure facilities.
    
"Hence, it is imperative for developers to take a cautious approach towards rental expectations during this rising, yet fragile market," it said.