Office space prices may tapper off
India's buoyant economy would expect prime office-space rentals in the metros to spiral further. However, according to a recent survey conducted by real estate consultancy firm DTZ India, the ongoing boom in the prices in the A-Grade leasehold space is likely to flatten in the near future due to over supply situation that will arise in major cities across the country. DTZ India estimates the supply situation across 7 major metros for 2007 - Banglore, Delhi NCR, Chennai, Pune, Kolkota, Hyderabad and Mumbai - to be in excess of 90 million sq ft, while the estimated cumulative absorption for the year would hover around 55 million sq ft.
Pune tops the list with an estimated over supply of 208%. Next in line is Chennai with an estimated over supply of 192%. In Bangalore, this estimated excess supply stands at 38 per cent, in Kolkata at 66 per cent, in Delhi NCR at 20% and Hyderabad is at 33 per cent. Mumbai is the only market which has an undersupply. It’s going as strong as ever, with growth in the financial services business in the city driving this demand. Over the next three years though, there might be some significant sized developments that will come up in new places such as Navi Mumbai and Vashi.
To view the complete survey report, you can click on 'Research' and register at DTZ India
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