Industry experts foresee that a decrease in the supply of new office spaces will likely exert upward pressure on rental prices in the forthcoming quarters, amid a backdrop of moderated demand.
In the second quarter, less than 3 million square feet of office space made its way into the market, equating to a staggering dip of nearly 55 percent compared to the same time frame in 2012, and a substantial 79 percent reduction compared to the first quarter in 2013.
As major corporations seek out quality locations that feature lower rental rates, the demand for office spaces is expected to remain reasonable to low in certain urban locales.
The sluggish momentum in property transactions has led to a backlog of supply poised to enter various micro-markets over the next 6 to 9 months. This influx could further place pressure on asset pricing. 
Throughout the quarter, six significant cities including Delhi NCR, Bengaluru, Mumbai, Chennai, Kolkata, and Pune experienced a notable rental space absorption totaling 7.5 million square feet, which marks a 25 percent decline from the 9 million square feet accounted for last year.
This diminishing demand showcases the current climate of low business and investor confidence. Various factors, including an economic downturn and political unrest, have led many firms to postpone decisions related to real estate commitments.
The commercial market in Mumbai saw an occupancy rate of approximately 7.3 lakh square feet of Grade A office space. In Delhi, only a limited number of mid-sized transactions were finalized, resulting in 2.1 lakh square feet of Grade A office absorption for the quarter.
Gurgaon recorded a healthy absorption figure of around 1.8 million square feet, while Noida followed closely with 4.8 lakh square feet, primarily driven by the IT/ITeS sector, backed by the banking and financial services industry.
The Chennai market had an optimistic spike this quarter, boasting an overall engagement of Grade A office space reaching about 2.12 million square feet.
Kolkata's market remained subdued amidst the prevailing negative economic sentiment, managing to record absorption of nearly 1.9 lakh square feet, while Pune's office market showed steady performance due to sustained occupier demand from the IT and ITeS sectors, resulting in an absorption rate of 9.2 lakh square feet during this quarter.
Despite the tempered demand, rental values are anticipated to hold steady, as developers are reluctant to introduce more uncertain supply into an already sluggish market.