Mumbai : Decline in supply of additional office space is likely to put pressure on rental values in the coming quarters, even as the demand is expected to be moderate, industry experts say.
According to a report, less than 3 million sq ft of office space was added in July-September quarter, which is a decline of nearly 50% compared to the same period in 2012, and 75% compared to April-June quarter of 2013.
“Owing to a slowdown in construction activity, pent up supply has been lined up across various micro-markets for release over the next 6-9 months, which might result in pressures on asset pricing,” CBRE South Asia Chairman and Managing Director Anshuman Magazine said.
The demand for office space is likely to moderate or even be low in certain cities, mainly because corporates are now focusing on consolidation and relocation to quality locations with lower rentals. In Q3 2013, relocation and consolidation were primary demand generators for commercial office space, global consultancy firm Colliers International said.