With supply exceeding demand, office rentals will remain stable or even marginally fall in the seven major cities, leading real estate consultant CB Richard Ellis (CBRE) today here said.
"The supply dynamics will continue to put pressure on the rental value and, therefore, in the short-term, rentals in most micro-markets would remain stable or correct marginally," CBRE said in the report.
The report, which reviewed the prime rentals across key cities in the country in January–March period revealed that rental value in NCR's Central Business District (CBD) appreciated by 4 per cent while it remained constant in Mumbai, Chennai, Hyderabad and Pune.
The CBD of Kolkata witnessed the highest accretion in rental value of 11 per cent, it said, adding due to limited leasing activity, the rentals in the Bangalore CBD further corrected by 4 per cent during the period.
Stating that the demand for office space have picked up in most of the top cities on demand from IT majors, the report said future rental dynamics would depend on the velocity of absorption of existing demand.
"The interesting dynamic to watch out for over the next few quarters would be the leasing activity that IT companies undertake in both STPIs and SEZs – in the background of uncertainty of the extension in the STPI parks," it said.
