Delhi NCR Property Demand Drops
The demand for office spaces across the country was up by 19 per cent in the third quarter (July-Sept, 2009) over the previous one. Bangalore witnessed the highest demand in the third quarter with 2.3 million sq.ft. followed by Mumbai at 1.2 million sq. ft. However, the gap between supply and demand increased to over 130 per cent (from 50 per cent) in the last quarter, increasing the average vacancy across major cities in India to 17 per cent from the previous quarter’s 13-18 per cent, according to the third quarter office Market beat.
Property in Delhi NCR declined over the previous quarter due to subdued interest from the corporate sector in anticipation of further decline in values along with shelving of their expansion plans. Additionally, high availability of ready to move in options has resulted in no pre-commitments for the future supply, impacting the demand for the quarter.
The total fresh supply registered in Q3 2009 was approximately 15.9 million sq.ft. Mumbai, leading the supply scene, saw an infusion of 3.73 million fresh supply followed by Delhi NCR (2.26 million sq.ft.) Kolkata, traditionally a low supply market witnessed infusion of 1.7 million sq. ft. while Ahmedabad witnessed no supply in the quarter.
The office market sector in India is on a gradual improvement curve with demand just about beginning to pick up. However, vacancy levels have not seen much respite since supply also increased significantly and simultaneously in anticipation of this demand. The third quarter saw some surprise with Mumbai witnessing significantly high supply as well as absorption. Pre-commitments were recorded at an all time low owing to the increased vacancy levels with the exception of Bangalore and Chennai
Demand for office space in Delhi NCR
Demand for office space in Delhi NCR in the third quarter was recorder at 656,300 sq.ft. with no pre-commitments. A 30 per cent drop in demand from the previous quarter absorption was driven by commercial office segments (63 per cent) predominantly in Gurgaon and Delhi and in the IT / ITEs segment including SEZ space. Gurgaon recorded 243,800 sq.ft. Space take-up. Most of the micro markets continued to witness correction though rental values across south micro market and Noida (IT/SEZ) stabilized having achieved sustainable levels with no new supply entering the market.