The worsening global meltdown has severely hurt the global economy especially the reality sector as the office rental prices in major Indian cities have fell down by up to 10% during the first quarter (Q1) of the 2009. A global realty consultant CB Richard Ellis (CBRE) reported it on Wednesday.
Releasing a report entitled “Asia Office Rental Index” CBRE said, ‘rentals across prime buildings in New Delhi and Bangalore underwent a correction of over 10 percent, while that in the Mumbai commercial and business district suffered a 6.7 percent drop.’
‘This trend is likely to continue in the near future too,’ it added.
“Demand for office space in major cities in India remained weak as economic and business sentiment continued to deteriorate, especially in the financial services and IT sectors. Any major increase in demand is unlikely in the near term,” the report said.
The Asian rental markets have witnessed the sharpest fall, according to CBRE, as it has declined to 18.5% from their peak in the second quarter of 2008.
On quarter-on-quarter (Q-o-Q) basis during January-March, the overall office rents in Asia fell to 7.9%, reported the world’s largest Real Estate consulting firm.
Singapore registered the sharpest fall of 18.6% in rents, while the rentals of overall office in Hong Kong slipped by 14%.
The report also added that except Seoul, all markets in Asia region plummeted to 7.9% during the Q1.
Describing the reason behind this fall, the global realty consultant pointed out that the downsizing and cost cutting by companies, besides decline in leasing activities and renegotiation of rental agreements, are major factors behind this fall.
However, the firm also stated that if the global economy begins to stabilise, the Indian economy might see the benefits earlier than many other countries resulting in improved demand in the office sector.
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