Friday, October 03, 2008
The deals for office space in Mumbai have slowed down over 30 per cent in the last three months. This depression in the commercial market is a sign of the fall-out from the financial crisis in the US. IT and BPO service providers and finance firms, with significant US businesses cutting back on expansion plans and, therefore, the need for prime commercial real estate. Meanwhile, tighter liquidity at home is encouraging companies to defer their property bookings. Bandra Kurla Complex where rentals peaked at Rs 450 per sq ft a month, clients are now negotiating with developers at below Rs 300 per sq ft. Rents are expected to come down to Rs 200 a sq feet when three prominent buildings are completed in six months. In the Churchgate area, which houses old office buildings, rentals have already settled at Rs 240-2sq ft a month from Rs 325-350 a sq ft barely two months ago. That is a 45 per cent correction. Rentals are expected to fall another 15 to 20 per cent in the next six to nine months as IT and BPO companies cut back on expansion plans as the financial crisis in the US, their biggest market, kicks in.