Office space absorption in the country has gone down by 41.11 per cent cumulatively in the three quarters ended September this year, as a fallout of the global economic slowdown, according to a study.
The total office space take up between January and September this year stood at 5.3 million sq ft as against 9 million sq ft in the corresponding period last year, according to global commercial real estate services firm CB Richard Ellis.
"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," CB Richard Ellis chairman and managing director (South Asia) Anshuman Magazine said.
In its quarterly 'India Office Market View' report, CBRE covered seven cities and found that the cities showed a marked slowdown in demand and office space leasing that had moderated in the first two quarters of the year.
"Many corporate occupiers, especially in the IT/ ITeS sectors have postponed or curtailed their expansion plans.
"Together with this, the fund availability for the sector which was already constrained due to the inflation control measures of RBI, will be further curtailed by the recent financial crisis in the US and its ripple effect on rest of the world," it added.
According to the report, rentals in the National Capital Region are likely to remain stagnant for the next few quarters.
It, however, said demand for corporate office space is not likely to be affected in the next few quarters, especially in the micro-market of New Delhi, where maximum space take up is in this category rather than IT/ITeS.
The rentals and capital values across most micro-markets in Mumbai are expected to undergo further correction, it said.
"This can turn out to be more severe by mid 2009, if there is no improvement in the overall economic climate and the supply hits the market as per the timeliness indicated by the developers," it said.
Space absorption also dipped in Bangalore, Chennai, Hyderabad, Pune and Kolkata.
The report anticipated office market space absorption in these cities to remain low over the next few quarters, reflecting the global economic conditions affecting commercial real estate in India.