India's Office Space Absorption Plummets Amidst Global Economic Slowdown
Office space absorption across India has experienced a significant decline, plummeting by 41.11% during the first three quarters of 2008. This downturn is attributed to the ripple effects of the global economic slowdown, impacting the commercial real estate sector.
Between January and September 2008, the total office space taken up amounted to a mere 5.3 million square feet. This figure stands in stark contrast to the 9 million square feet absorbed during the same period in the preceding year. These findings come from a report by global commercial real estate services firm CB Richard Ellis (CBRE).
CBRE Chairman and Managing Director (South Asia), Mr. Anshuman Magazine, provided his perspective on the situation: “The global economic slowdown has started to show early signs of impact on the offices market. The third quarter of 2008 has seen some decline in the office space take up across the country. Going forward, this is expected to keep office rentals under check.”
The firm's quarterly report, titled ‘India Office Market View,’ encompassed an analysis of seven major cities. The comprehensive study revealed a notable deceleration in demand. It further highlighted that the decline in office space leasing, which had been moderate during the first two quarters, intensified in the third quarter. The report emphasizes the far-reaching impact of the global economic downturn on the country's office market, potentially keeping rental rates in check in the foreseeable future. The downturn, which appears to be a direct consequence of the global economic climate, has raised concerns within the commercial real estate industry. This could have long term impacts if the global scenario does not improve. It remains to be seen how long and heavily the office space market will be affected by the downturn.