By IANS,
New Delhi : Office rental prices in major Indian cities fell by up to 10 percent in January-March, said a report released by global realty consultant CB Richard Ellis (CBRE) Wednesday, adding that the situation was unlikely to improve in the near future.
According to the Asia Office Rental Index, rentals across prime buildings in New Delhi and Bangalore underwent a correction of over 10 percent, while that in the Mumbai commercial and business district suffered a 6.7 percent drop.
“Demand for office space in major cities in India remained weak as economic and business sentiment continued to deteriorate, especially in the financial services and IT sectors. Any major increase in demand is unlikely in the near term,” the report said.
Anshuman Magazine, chairman and managing director (South Asia) of CBRE, said the office market rentals would likely remain subdued in the short to medium term.
“However, if the global economy begins to stabilise, I feel that the Indian economy would see the benefits earlier than many other countries resulting in improved demand in the office sector,” Magazine said.
Overall office rents in Asia fell 7.9 percent quarter-on-quarter in the January-March period, according to the CBRE Asia Office Rental Index.
Overall Asian market rentals have now declined 18.5 percent from their peak in the second quarter of 2008, with Asia’s major financial centres suffering the sharpest falls.
The last quarter saw Singapore recording a 18.6 percent drop in rents while in Hong Kong overall office rents declined 14 percent quarter-on-quarter.
The oversupply problem in China exerted additional pressure on rents and continued to push up vacancy levels in key cities. Beijing, Shanghai and Guangzhou recorded the highest vacancy levels in Asia.
Vacancy remained below 5 percent in Singapore, Tokyo and Seoul.
Despite the deteriorating Korean economy, landlords in Seoul’s major business districts opted to raise rents in their customary annual review as no significant new supply is set to come on stream until 2010-11.