Leasing office space in metros might soon get easier. A report finds that office rentals are headed for stabilisation.

After having increased by more than 100% over the past year, office rentals in Mumbai, Delhi, Bangalore and Chennai are expected to stabilise. That is what a recent report by real estate consultant Jones Lang Lasalle Meghraj (JLLM) says. Increasing corporate demand caused urban office rentals to skyrocket. In Mumbai and Delhi they were Rs 350-375 a square foot a month. Until the last quarter, rentals rose significantly quarter-on-quarter. But going forward, JLLM expects only a 10-20% increase per annum.

The stabilisation is because of two reasons. According to CEO, JLLM, "One, is the increase in supply in most of the markets, will be slightly more significant than they have been in the past. And two, because some of these corporates are looking at more than one market; they are willing to explore cities, where the supply is grander, and more in favour."

The report predicts that by 2008 an additional 10.5 million sq feet of office space is expected both in each Mumbai and Chennai. In Delhi and Bangalore too, 8 million square feet each, is expected.

Experts say this additional expected supply will help to balance the demand-supply gap.


News Source: moneycontrol.com
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  • That's reasonable.

    Definitely, stabilization is the need of the hour. Property rentals or capital values can't keep on going up all the time. They’ve already touched the ceiling in metros and are bound to come down to realistic levels.
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