Even as commercial real estate prices continue to soar, a report by international property consultant Trammell Crow Meghraj says that office space rentals in the key IT-ITeS hubs — Delhi-NCR, Bangalore, Mumbai, Chennai, Hyderabad, Pune and Kolkata — will stabilise by 2010.

At present, the demand for IT space outstrips supply. The developer community will bring in space to the tune of 20 million sq ft by 2010. Out of this, 12 million sq ft will be situated within IT SEZs being developed by players like DLF, Unitech, and RIL. The present upward pressure on office rentals in Delhi and its suburbs will ease once this supply hits the market in the medium term.

In Bangalore 10.6 million sq ft will come into the market in the next two years. Another 67 million sq ft is in the pipeline, in addition to the proposed mega supply from 12 IT-ITeS SEZs.

In Mumbai, about 8 million sq ft will hit the market in 1-2 years. Another 5.6 million sq ft supply is in the pipeline, as are two proposed SEZs covering 67 hectares. Chennai has 26 million sq ft of IT parks under construction and another 20 million sq ft of proposed IT space, being developed mainly by private developers.

According to the report, once all this supply hits the market, rentals will stabilise in the seven cities. The report comes as good news to corporates and businesses, which have been adversely affected by the sharp increase in rentals over the past three years. Rents in Mumbai have risen by 180 per cent — from Rs 50 per sq ft per month in 2004 to Rs 140 in 2006. Rentals in Delhi have nearly doubled, from Rs 60 per sq ft per month to Rs 120, over the same period.
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