Increase in new supply keeps demand, office rent flat in Apr-Jun across top 6 cities: Colliers

Amid a jump in new supply, India's property market saw only a marginal increase in demand, owing to steady office rental prices in the quarter from April to June, an analysis by real estate firm, Colliers India, said.

The firm studied the real estate market from the April to June period in six cities including Bengaluru, Mumbai, Pune, Delhi-NCR, Hyderabad and Chennai. New supply surged by 32 per cent across the six major cities, and demand inched up 2 per cent, owing to flat office rental prices of ₹95 per square feet (sqft) in the quarter.

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Gross office space leasing also saw an advancement of 2 per cent from 14.3 million sqft to 14.6 million sqft year-on-year, the firm said, in a report analysing the quarterly data of the six major office markets.

Bengaluru's new supply more than doubled to 3.8 million sqft from 1.6 million sqft, while office space leasing fell 22 per cent from 4.4 million sqft to 3.4 million sqft. Rentals were in line with the broader market, growing marginally by 1 per cent.

Similarly, Chennai's new supply also more than doubled to 2.4 million sqft from 1 million sqft, however, its office leasing also showed an upward advancement, tripling to 3.3 million sqft from 1.1 million sqft. Rentals trudged up 2 per cent.

New supply in Delhi-NCR saw a spike of 43 per cent, while office leasing was up 11 per cent. Rentals again appreciated by 2 per cent. Pune saw a 52 per cent increase in new supply, which resulted in a 1 per cent rise in office rent, owing to flat demand. Office space leasing however, went up by 28 per cent.

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On the other hand, new supply in Telangana capital Hyderabad fell 19 per cent to 3 million sqft from 3.8 million sqft. Despite lower supply, office demand also declined by 22 per cent, while office rental prices were steady at ₹73.7 per sqft from ₹73.6 per sqft.

Financial capital Mumbai was a similar story, with supply plunging 79 per cent. That resulted in a 41 per cent drop in gross office space leasing, while office rent prices remained steady.

(With PTI inputs)