Drop in office space rentals

Mumbai, April 22

Office space rentals have dropped five to 20 per cent across cities in the first quarter of 2009 as compared to the last quarter.

Global real estate service provider CB Richard Ellis’ office space review report says this is due to sluggish demand and the tendency, especially by the financial and IT sectors, to postpone real estate initiatives.

NCR

Connaught Place saw enhanced levels of second-hand space with tenants relocating to cost-effective destinations. With more malls becoming operational in the Saket District Centre, basic infrastructure was stretched.

Supply released in the last quarter (about 0.22 million sq.ft) was not absorbed, leading to a vacancy of around 35 per cent. Gurgaon continued to be slow with the IT and financial sector facing the heat of the economic downturn.

Average rentals at Connaught Place for March were Rs 240 a sq.ft a month compared to Rs 280 a sq.ft in December.


Rentals at Nehru Place were Rs 180 a sqft against Rs 225 in December. IT space in Gurgaon averaged Rs 45 a sq.ft against December rentals of Rs 55, and at Noida it was Rs 38 a sq.ft, against Rs 40 a sq.ft in December.

The central business district of Nariman Point witnessed a significant correction in rentals over the last 6-9 months.