Delhi NCR Rents may Stabilize Next Quarter: Report

Rentals in the National Capital region are expected to stabilize in
the next quarter as supply is set to increase Gurgaon and Noida, says
a report.

According to commercial real estate services firm CB Richard Ellis,
rentals are expected to be stable in the next quarter as the supply
is set to increase significantly in Gurgaon and Noida.

"However, no significant change in supply is expected in Delhi
except in Jasola where an additional 500,000 sq ft is expected to be
added in the second quarter," the report stated.

Rentals rose steadily in the Central Business District Area of Connaught
Place in the absence of any new supply in the first quarter of 2008.

The report stated that an evident feature in the last quarter was that
a number of the older buildings made a noticeable attempt to improve
infrastructure in their premises in an attempt to cash in on the low
available supply and high rentals.

However, CBRE forecast that there would be no respite in rentals in
the near future in the absence of any upcoming supply in the Central
Business District of Delhi.

The average rent in Connaught Place (Grade A) rose to Rs 340 per sq
feet per month in March this year from Rs 325 in December 2007.

While in the peripheral markets Gurgaon and Noida, the rentals are
expected to stabilize in the next quarter.

Rentals in Gurgaon showed no sign of a meltdown in the previous quarter.
However, they are expected to remain stable in the next quarter with
additional supply on the MG and Golf Course Road offsetting the corporate
demand, the CBRE report said.

Besides, in Noida rentals were marginally higher in the last quarter
but are expected to be steady with high supply available especially
in the industrial/institutional sectors.

Noida continues to be an attractive destination for IT/ITeS companies
primarily for their back office operations.

The report said that absorption rates in Noida are expected to rise
significantly this year with improved infrastructure and affordable
rentals.

Photo: Old Delhi city skyline from Jama Masjid, Delhi, India by Vyacheslav Argenberg, licensed under CC BY 4.0, via Wikimedia Commons.