According to a report submitted by an agency the Indian real estate sector is likely to face the problem of plenty with office rental space set to outstrip demand resulting in a further drop in rentals. “With the forecast growth of net completions expected to outpace that of net absorption, a significant supply overhang is expected to remain over the next one year,” Confederation of Indian Industry (CII) and a global real estate services firm. “This will lead vacancy level across India, which was 17.2 percent in 2009 to rise to 20 percent by 2010 end,” it added.
The report said “the commercial lease and rental space in India would witness a low occupancy rate till 2011.” The report, however, added that most Indian cities have witnessed an increase in the volume of lease transactions in the first quarter of 2010 with Delhi, including the national capital region, Mumbai and Hyderabad having recorded more than a million square feet of leases each. In 2009, occupiers showed a strong preference towards operational vacant stock rather than projects under construction, a departure from 2007-08, the report pointed out. On the future trend, report said the most micro markets were expected to reach their rental lows within the next 2 3 quarters, if not reached as yet.
The report titled “The Seven Stars of India India’s best performing micro markets for occupiers” highlights the trend and forecast on realty rental market in seven cities of India Delhi, Mumbai, Pune, Chennai, Bangalore, Hyderabad and Kolkata.
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