Of­fice space sup­ply a chal­lenge in next 6 months, says re­port

Hindustan Times (Chandigarh) - Estates - - HT ESTATES -

MUM­BAI : Sup­ply of new of­fice space will re­main a chal­lenge in the next six months ow­ing to pro­ject de­lays and lack of qual­ity of­fice space, a re­cent study re­vealed.

Ac­cord­ing to a sur­vey con­ducted jointly by prop­erty con­sul­tant Knight Frank, the Fed­er­a­tion of In­dian Cham­bers of Com­merce and In­dus­try( FICCI) and Na­tional Real Es­tate De­vel­op­ment Coun­cil (NARDECO), nearly 64% of the re­spon­dents be­lieved that new of­fice sup­ply will re­main a chal­lenge in the next six months.

“Th­ese sen­ti­ments co­in­cide with the mar­ket re­al­ity as well as where the pro­ject de­lays and lack of qual­ity of­fice space in key lo­ca­tions have led to a sup­ply crunch in all the ma­jor cities of the coun­try,” the re­port said.

New of­fice sup­ply has been elud­ing the mar­ket for the past two years and the sen­ti­ments in Q2 2017 sub­stan­ti­ate this fact, it said.

“The of­fice leas­ing has been hold­ing steady in the past few years but the leas­ing vol­umes in the first and sec­ond quar­ter of 2017 have been low across cities. This is cor­rob­o­rated by the mar­ket sen­ti­ments as well, where more than half of the stake­hold­ers opine that leas­ing vol­ume will ei­ther hold steady or fall fur­ther in the com­ing six months,” it said.

The re­port fur­ther noted that the pres­sure on the IT/ITeS sec­tor and the lack of qual­ity sup­ply in key lo­ca­tions has all contributed to­wards the slow­down in leas­ing of of­fice space.

How­ever, this lack of sup­ply will lead to an up­ward pres­sure on rentals, it said.

Ac­cord­ing to the re­port, nearly 86 of the re­spon­dents opine that of­fice ren­tal ei­ther will re­main the same or will move up in the com­ing six months.

“Of­fice sup­ply will be un­der pres­sure and lead to firm­ing up of rentals across cities. Leas­ing vol­umes will hold steady in the com­ing six months,” the re­port stated.

ISTOCK

The re­port says the pres­sure on the IT/ITeS sec­tor and the lack of qual­ity sup­ply in key lo­ca­tions has all contributed to­wards the slow­down in leas­ing of of­fice space.

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