MUMBAI: The prime office space segment saw a supply infusion of over 20 million sq ft across key cities in the country in the first six months this year.
The supply was primarily from large commercial and
SEZ developments that were completed.
in leading markets such as the city, Bangalore, National Capital Region (NCR) of Delhi, and Pune, says the latest report by CBRE, a real estate services firm.
The report, India Office Market View, said that in the past three months, supply of prime office space saw a 16% increase year on year and an 8% increase quarter on quarter.
Transaction activity in the second quarter of the year was dominated by the city, NCR, Bangalore and Pune, representing about 88% of the transacted space during the quarter.
About 7 million sq ft of space was absorbed in the past three months compared to 6.6 million sq ft in the first quarter. Around 10.8 million sq ft of new office space entered the market in the second quarter of the calendar year and around 9.9 million sq ft in the first.
Absorption was down by about 6% compared to the same period last year.
Supply pressures continued to dictate rental movement with a clear segregation of micro markets in terms of rental behaviour across leading cities.
Rents were either stable or appreciated marginally in demand-driven micro-markets such as Connaught Place, Gurgaon, Outer Ring Road,BKC and Lower Parel. Rental sentiment in supply-driven micro-markets like Thane, Navi Mumbai, Powai and Vikhroli were on a downward trajectory.
Occupier focus continued to be on consolidation and more efficient use of their existing portfolio. Although well positioned assets continued to attract occupier interest, transactions continued to take much longer to conclude.
"Despite a large supply infusion into the market, the prevailing global economic outlook continues to play a big part in expansion plans for corporates across the board," Anshuman Magazine, chairman and managing director of CBRE South Asia Pvt. Ltd, said. "Cost reduction continues to be a primary concern and the overall mood in the leasing market remains cautious. I expect this sentiment to continue till the global as well as Indian economic situation improves."
The India Office Market View is a quarterly report which provides a summary of office rents across key cities in India. It includes average rental rates for the coming quarter as well as an outlook for the next quarter. The India Office Market View report also covers Grade A office space rentals across the city, NCR, Bangalore, Chennai, Hyderabad, Pune and Kolkata.
Source : timesofindia.indiatimes.com