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Cover Story


Lower commercial rentals staring in the face


By Bindu Gopal Rao


In the realty space, commer- cial and office space drives numbers. However in the re- cent past several reports have suggested that there is over- supply of office space, thus beating down rentals and the office space market in some regions has become sluggish. GIREM speaks to industry experts to learn more.


Number Crunching If we look at the Commercial Real estate scenario in India , the IPC’s had forecasted that the stock of commercial office spaces expected to be sup- plied to the market in FY 2012 would be actually 20% to 25% more than the office stock that was supplied in FY 2011.


6 GIREM 101


On the other hand, it was also expected that there would be a 7% to 10 % drop in the demand – looking at the global cool off.


“On the contrary, the market has seen a 25% to 30% drop in the demand for Commercial office spaces in FY12 as most corporates are treading cau- tiously. They have held back their capex and are looking at the global scenario to improve. Hence there is an oversup- ply in the market and vacancy levels are quite high. This has resulted in lower rentals ROI in the Commercial Real Estate,” says Tithi Gautam, Senior Director, Space Matrix, New Delhi.


Tithi Gautam, Senior Director, Space Matrix


The absorption of commer- cial space has been affected, especially in larger markets like Delhi & Mumbai, where rental levels are generally quite


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