Office space absorption fell by 14% in Jul Sept in top seven cities
Oct 09, 2013
Source : The Economic Times


DELHI: Leasing of office spaces in India's top seven cities fell by 14 per cent to around 6 million sq ft during July-September compared with the previous quarter with corporates still being cautious about expansion amid subdued economic outlook, property consultant CBRE said.

The weak demand for office spaces hit supply drastically with less than 3 million sq ft of new space added during the July-September against about 10 million sq ft in the previous quarter. The office rentals were also largely stable.

"A sluggish global economy, a substantial drop in India's GDP growth, uncertainty, volatile currency, high interest rates, etc. have been a deterrent for corporate growth and expansion. The has resulted in declining office absorption across the key metros in the country," CBRE South Asia Pvt Ltd Chairman and Managing Director Anshuman Magazine said.

According to the CBRE's 'India Office Market View Q3 2013' report, the office space absorption in the top seven cities of the country declined by about 14 per cent quarter-on-quarter registering around 6 million sq ft as compared to around 7 million sq ft in the previous quarter.

These top seven cities are National Capital Region (NCR), Mumbai, Bangalore, Chennai, Hyderabad, Pune and Kolkata.

"Corporate office occupiers remained cautious amid a subdued economic outlook, a trend which continued to inhibit office leasing activity across the country," it added.

The demand for office space weakened in most markets as corporates continued to optimize their portfolio (downsizing in certain instances), focus upon consolidating their realty footprint and opt for relocating to peripheral locations.

The transaction activity was dominated by the NCR, Mumbai and Bangalore, each recording more than a million sq ft of office space leasing during the review period.

Gurgaon in the NCR, Lower Parel, Andheri, Goregaon and Navi Mumbai in Mumbai and the Outer Ring Road in Bangalore were the most preferred locations for office space leasing.

"The July-September period witnessed the lowest addition of office space over the past several quarters, largely due to the prevailing high vacancy pressures in completed projects and poor commitment levels in under-construction properties," the report said.

The rental values remained largely stable as occupiers faced cost pressures, and consolidation continued to be the key theme, CBRE said.

Owing to increased occupier interest in leading Grade A properties, marginal appreciation to the tune of 2-3 per cent was observed in the central business districts (CBD) of Delhi, Bangalore, Chennai and Pune.

Interestingly, Mumbai's Nariman Point and Bandra Kurla Complex were the only micro-markets which saw a marginal rental drop, owing to sluggish demand and a preference for the city's cost-effective peripheral locations.

On the outlook, the consultant said rental and capital values are likely to remain under pressure in most micro- markets in the short to medium term on expectation of a large supply addition.


Latest Realty News

44 illegal colonies in Gurgaon to get amenities
Oct 09, 2013
DELHI: In a move that will provide relief to lakhs of residents living in unauthorized colonies in the city, the Haryana government has passed the Haryana Management of Civic Amenities and Infrastructure Deficient Municipal Areas (special provisions) Act 2013. This will enable the Municipal Corporation of Gurgaon (MCG) to provide basic amenities like water, electricity, roads, streetlights and sewage disposal to the residents living in these areas. The urban local bodies department has already i
No buyers for Lutyens’ Bungalows for fear of getting spotted by politicians looking for funds
Oct 09, 2013
DELHI : Available now: A dozen or so bungalows in the heart of Delhi. Nice, quiet neighbourhood. Lots of trees. Generous parking space. Few high-rises in close proximity. Suggested price of 150 crore and above said to be a bargain.
Curbs on realty foreign direct investment below 50% may stay
Oct 09, 2013
DELHI: The government may reject the urban development ministry's proposal to scrap all restrictions on foreign direct investment below 50% in real estate on the grounds that there can be no exemptions on rules such as minimum area norms.
Buying a property: Read the sales agreement carefully
Oct 08, 2013
DELHI: It can take months, even years, to find a dream home. After extensive bargaining, when you manage to seal the deal, remember to go through the sale deed in detail before signing on the dotted line.
WAVE Infratech launches Aranayam Valley in Ghaziabad
Oct 08, 2013
DELHI: WAVE Infratech, the real estate wing of WAVE Group has ventured into premium housing segment and launched Aranayam Valley in Wave City’s Greenwood Enclave. Featuring 2 and 3 BHK mid and high-rise premium apartments, Aranayam Valley is a 44 acres gated community strategically located in Ghaziabad for a rapid commute to Delhi and other NCR areas.
Studio apartments – a smart investment option
Oct 08, 2013
DELHI: Studio and serviced apartments have emerged as smart economical investment options in India, as several prominent developers have started offering these in other parts of the country as well. The demand for studio apartments is outstripping the existing supply, generating high rental income, property appreciation and offering opportunities to high-value business tenants. Investors, especially NRIs, believe that investment in studio apartments is a wise and cost-effective decision, as it o
Hotel deals: It's a buyer's market
Oct 08, 2013
DELHI: Even as about 30 branded hotels and 40 non-branded properties and land parcels are on the block in the hospitality industry, experts say for big-ticket transactions, it might turn out to be another wait-and-watch year, unless the economy improves and the asking prices of most of these assets fall.
Govt mulls easing FDI rules for construction development
Oct 08, 2013
DELHI: In a bid to bring foreign money to the cash-strapped realty sector, the department of industrial policy and promotion (DIPP) has moved a Cabinet note seeking relaxation of riders on foreign direct investment (FDI) in the construction development sector. The move comes after FDI in real estate dropped 57 per cent year-on-year in 2012-13 .
Red Fort Capital to invest Rs 1000 crore in Lotus Greens projects
Oct 08, 2013
DELHI: Realty firm Lotus Greens Developers today said private equity firm Red Fort Capital would invest Rs 1,000 crore in its various residential projects in the national capital region.
Godrej Properties partners Ador Group to build housing project
Oct 08, 2013
DELHI: Godrej PropertiesBSE 0.77 % today announced an agreement with Ador Group to develop a luxury housing project spread over almost seven acres in Mumbai.

Latest Realty News Of State

Realty Talk's