A landmark office tower at Worli, which commanded rentals of Rs 550 per sq ft, has seen a decline to Rs 375 per sq ft, said a city-based property consultant. He added that rentals in BKC, which had gone up to around Rs 450 per sq ft, are likely to soften by Rs 75 to Rs 100 per sq ft.
The addition of new office space over the next six to eight quarters is expected to lead to a further decline in rentals. Nearly 15 million sq ft, the equivalent of the BKC, of office space will be added in Mumbai by end-2008, the NCR is expected to see an addition of 7 million sq ft of office space.
"Rentals will not grow by 30 to 40 per cent now as was the case till now. Rates in the prime city centre areas will not fluctuate much," said Gupta, adding: "Rentals in the suburbs will not grow more than 8 to 15 per cent."
Given that economic growth is expected to slow in 2008-09, experts say reduced demand could see more supplies coming into the market.
Image: Labourers work on a construction site in Bangalore
Photograph: Dibyangshu Sarkar/AFP/Getty Images
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