City's office space leasing to pick up in 2015: CBRE

MUMBAI: Office space leasing activity in the city is not expected to move significantly before next year although the sentiment in the real estate sector is witnessing some improvement, says property consultant CBRE.

"Market sentiment in Mumbai's office space has seen a slight spurt in the April-June period compared to the last couple of quarters and is expected to fare better in Q3 of 2014," CBRE South Asia Chairman and Managing Director Anshuman Magazine said in a statement.

"However, ground realities in this segment are hardly likely to change this year as far as actual investments and project funding are concerned," he said.

Although a gradual recovery is on the cards, office space leasing activity is not expected to move significantly before 2015, he said.

The micro-markets of Bandra-Kurla, Lower Parel and Andheri are likely to witness a reasonable level of corporate interest mainly due to a surplus supply situation, Magazine said.

The rentals are, however, likely to remain stable in the micro-markets and would continue to remain so over the forthcoming quarters too, he added.

According to CBRE, central business district of Nariman Point, Fort and Cuffe Parade saw sluggish transactions during the second quarter of the year.

Magazine said: "Enquires remained limited to small and medium sized office spaces in some of the prominent commercial developments. Vacancy levels increased marginally owing to shift in occupier interest towards other cost effective micro- markets, while rental values declined owing to subdued demand levels."