Decline in long term office rentals in India
Serviced office rentals in India on short flexible leases are the way forward for Indian companies in the current climate according to recent coverage of Indian office rentals.
This point was emphasised by a recent report by Jones Lang LaSalle (JLL), which said the decline in property prices in India is expected to continue through the year with office rentals in India expected to fall by 15-20%, as the slowdown-hit realty sector is likely to see a recovery only in the second half of 2010.
Indian office rentals are expected to fall up in the next three quarters, with key cities like Delhi office rentals and Mumbai office rentals are likely to witness a decline . In today’s conditions companies want a more flexible approach when renting offices in India and are moving away from longer leases for fear of uncertainty. Flexibility is key with the ability to rent small spaces and add on rental office space as and when it is needed as opposed to long and cumbersome leases.
Long term office rentals in Chennai, Kolkata, Hyderabad and Pune are expected to decline between 30% and 40% from their peak during the next three quarters, while the same in Bangalore will fall 15-20% from its peak. On the current economic scenario, the report said the recent gains in the equity market propelled optimism in the economy and if it continues, a recovery is expected by early 2010. Although the effects of this upturn would start showing signs in the real estate sector, the gains would definitely come in second half of 2010, when fresh demand again builds up in the market and the latent demand suppressed on fears of a downslide comes back the report said.
In today’s conditions companies want a more flexible approach when renting offices in India and are moving away from longer leases due the economic uncertainty.
Tags: Bangalore office rentals, Delhi office rentals, Hyderabad office rentals, Indian office rentals, Jones Lang LaSalle, Mumbai office rentals, Office rentals in India, Pune office rentals, serviced offices in India
May 27th, 2009 at 1:43 am
Yes I agree that there is sharp decline in office rentals. Major business corporate are planning to shift their operations to smaller towns surrounding metros. Work from home culture is another factor responsible for this trend.