Prime office space demand improves in March quarter

A report by CB Richard Ellis says vacancy levels in Mumbai declined from 18.2% to 12.9% over the quarter

Demand for prime office locations in the country's financial capital, Mumbai has improved in the first quarter of 2010, thus bringing down vacancy level of such premises by over five percentage points to 12.9%, reports PTI.

According to a latest report by the global realty consultant CB Richard Ellis (CBRE), leasing activities in major Indian office markets remained buoyant in the first three months of 2010.

"In Mumbai, there was a noticeable rise in enquiry levels and transactional activity. The increase in demand compressed central business district (CBD) vacancy to 12.9% from 18.2% recorded in the final quarter of 2009," the report said.

The consultant said the CBD of the National Capital Region (NCR) reported an increased number of transactions in both Grade A and Grade B market segments.

The major business districts of Bangalore also reported a marginal increase in interest from occupiers and a marginal rise in leasing activity, it added.

"During the first quarter of 2010, while most micro-markets continued to face a situation of oversupply, demand levels did see upward movement. Overall, the economy in India has seen improvement during these past few months and this in turn has brought some stability to the real estate sector," CBRE chairman and MD (South Asia) Anshuman Magazine said.

In the short term, rentals in most micro markets are expected to remain stable or even may correct marginally, he added.

"I also believe that future rental dynamics would depend on the velocity of absorption of existing demand," Magazine said.

In its earlier report last month, CBRE had said that rental value in NCR's CBD appreciated by 4% in the first quarter of this year, while it remained constant in Mumbai, Chennai, Hyderabad and Pune.
 

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