Commercial realty remained sluggish in the first quarter

The leasing and buying in the commercial real estate market remained sluggish in India for the first quarter which ended on March 31 of the calendar year 2012. The total absorption of the office space was reduced by 12% when compared to the last quarter of the previous year. According to a report by DTZ India, a real estate consultant several factors led to such reduction which included inter alia weak domestic macro-economic indicators, cautious sentiments among Indian corporate and financial institutions. Also another factor which probably was responsible was that there was no change in the interest rates by RBI in the last quarter which restricted the companies from buying due to the anticipations of a fall in rates in the future. During this quarter the demand was highest in Bangalore, which was followed by Mumbai. However supply always surpassed the demand in the first quarter too, wherein around 5.9 million square feet of office space was added to leading cities across the country. Such supply was majorly experienced in cities like Bangalore, Delhi-NCR, Mumbai and Chennai. However in the coming quarters there are hopes of some positive news for the commercial real estate sector of the country which could perhaps result as an increase in demand from the MNC’s.