In India about 6 Crore sq. ft of office space is likely to remain vacant current 2011 across the country as fresh supply enters the market, according to a recent report by property consultant In the JLL (Jones Lang LaSalle) report
In Mumbai alone, around 8 crore sq. ft of commercial real estate will be ready for occupation by 2011 December the Jones Lang LaSallereport says, adding that as much as a fourth may not find takers as the economy slows.
Not surprisingly, rentals of Rs 500 per sq ft at the peak of the real estate boom before the collapse of Lehman Brothers in 2008, have come off by about 40%.
In Mumbai alone, around 8 crore sq. ft of commercial real estate will be ready for occupation by 2011 December the Jones Lang LaSallereport says, adding that as much as a fourth may not find takers as the economy slows.
Not surprisingly, rentals of Rs 500 per sq ft at the peak of the real estate boom before the collapse of Lehman Brothers in 2008, have come off by about 40%.
In Mumbai and Delhi & NCR, demand for corporate leases is slowing. It’s not surprising that of the total 6.7 crore sq ft of Grade A office space in Mumbai, about a fifth is vacant.
According to Indian real estate industry estimates, about 2-2.4 crore sq ft of office space is complete or near-complete in western suburbs like Andheri, but takers are few.
Demand calculations by developers have gone away with the global recovery taking longer than expected and the Indian economy slowing down. So, while Barclays rented space in the posh Ceejay House in Worli at a reported Rs 725 per sq ft in 2008, market sources say space in the building is now available at Rs 350-Rs. 400 per sq ft.
Demand calculations by developers have gone away with the global recovery taking longer than expected and the Indian economy slowing down. So, while Barclays rented space in the posh Ceejay House in Worli at a reported Rs 725 per sq ft in 2008, market sources say space in the building is now available at Rs 350-Rs. 400 per sq ft.
Cushman & Wakefield says that rentals in Nariman Point are around Rs 300 per sq ft per month, down from Rs 500 in middle of 2008.
In the JLL report said, over the last five years, the vacancies have risen from 5% in 2007 to about a18% per cent in 2010 and could hit nearly 23 per cent by end-2012..
Mr. Ramesh Nair, MD (Western Region) JLL told “In 2007-2008, demand for office space was outpacing supply across sectors like BFSI, pharmaceuticals and information technology. However, many information technology and BFSI players failed to set to shop as anticipated,”
Mr. Niranjan Hiranandani, MD of Hiranandani Group, “There is a slight supply and demand mismatch currently because the demand, across sectors, has not picked up proportionately.”
Mr. Ramesh Nair, MD (Western Region) JLL told “In 2007-2008, demand for office space was outpacing supply across sectors like BFSI, pharmaceuticals and information technology. However, many information technology and BFSI players failed to set to shop as anticipated,”
Mr. Niranjan Hiranandani, MD of Hiranandani Group, “There is a slight supply and demand mismatch currently because the demand, across sectors, has not picked up proportionately.”
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