The commercial property market in Mumbai and Delhi is expected to remain tight over the next few years, according to a recent report, though there may be some price correction as demand eases. Property consultants DTZ indicated in its most recent commercial property research report that new supply for Grade-A office space will be lower than expected in both 2009 and 2010.
The DTZ report, entitled Phoenix Hope, notes that “Developers will be forced to cut back new construction plans significantly given the low demand for office space due to overall slowdown of economy.”
Mumbai is already one of the most expensive commercial markets in the world, and initial reports indicated that the city would add over 30 million square feet of office space in 2009 and 2010. Now analysts are expecting only 16 million square feet of new space. Higher levels of vacancy in office spaces in Mumbai and other major cities is expected to keep rental rates at reasonable levels, and some expect to see a price correction.
Delhi was expected to add 67 million square feet of new office space, but current estimates indicate that less than 30 million square feet of space will be constructed before the end of 2010.
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