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Demand for IT AND ITeS office space in NCR to decrease
Global realty consultant, Jones Lang LaSalle Meghraj, has said in a report that though Indian office markets have continued to grow over the past few years, the last few quarters have seen a polarization in the office markets in terms of growth in demand across the country. Economic slowdown in the US is expected to temper demand for IT and ITeS office space in Gurgaon and Noida during the second half of 2008. The real estate trend will be different for office markets. The report has categorized the office markets across six major cities Mumbai, Delhi NCR, Bangalore, Chennai, Hyderabad and Kolkata in three broad segments. First segment includes markets which are likely to be “susceptible” in terms of retarded demand growth for the remaining half year of 2008, the report said.
The consultant has put Gurgaon and Noida (Delhi NCR suburbs), Whitefield and electronic city (Bangalore suburbs), OMR (Chennai suburbs), Thane and New Mumbai (Mumbai suburbs) and Rajarhat (Kolkata suburbs) in the “susceptible” category. “In case of the susceptible markets, demand from occupiers in the IT/ITES segment, could be rationalized on the back of economic slowdown in the US. “This coupled with the strong supply pipeline in many of these markets could lead to a potential consolidation in the respective markets, leading to relatively higher vacancies,” Jones Lang LaSalle said, adding that this might not lead to any immediate rental consolidation. The Consultant, however, cautioned that “if the global economic slowdown sustains, we foresee the vacancies to rise in these micro-markets due to strong supply volumes. This might put pressure on the rental values next year”.
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