Major fall unlikely in B'lore, NCR, Mumbai office rentals

NEW DELHI: Office rental prices are unlikely to see any major fall across the country's three major business hubs National Capital Region, Mumbai and Bangalore -- even as the commercial realty markets in these areas are expected to witness a significant surge in supply, a leading real estate consultancy firm said.

While Bangalore is expected to witness further rise in the average office rentals, those in Delhi and adjoining areas like Gurgaon and Noida as well as Mumbai are expected to remain mostly flat in the short to medium term, CBRE said in its latest office market review for Asia-Pacific region.

Only certain small pockets in National Capital Region (NCR) and Bangalore could see a correction in prices in the near future, while any downward correction is very unlikely across Mumbai region, it said.

"The National Capital Region (NCR; including Delhi, Gurgaon and Noida) is expected to witness flattening trend in rentals over the short to medium-term," CBRE said.

"However, some micro-markets with forthcoming supply is likely to experience a marginal value correction in the next six months," it said, adding there would be significant additional supply in Gurgaon, Noida and Jasola in South Delhi.

CBRE noted that in preparation for hosting the Commonwealth Games in 2010, rigorous efforts have been made to improve infrastructure all across the NCR.

For Mumbai it said, that with over one million square feet of corporate office supply currently available and another nine million square feet ordinary office space expected to come online in the next two quarters, rental values are likely to remain stagnant.