India is facing a situation of major real estate oversupply and is likely to witness “significant falls” in rentals this year, a report has said.
According to Jones Lang LaSalle’s (JLLS) March Global Market Perspective, stock of commercial property in major cities, such as Delhi and Mumbai, are forecast to expand by 50 per cent in 2009.
“Tier I cities in the emerging markets of China and India are facing a situation of major oversupply and also are likely to witness significant falls in rentals this year as vacancy levels climb ...
“The office stock in Delhi and Mumbai is forecast to expand by some 50 per cent in 2009,” the report said.
However, sentiments for the hotel sector are improving for Asian market as a whole, it said.
As for markets like Singapore, Tokyo and Hong Kong, which were heavily exposed to international financial services, landlords are drastically reducing rentals in an attempt to maintain occupancy levels.
“In the final quarter of 2008, net effective rentals fell by up to 20 per cent in these three markets, and the first quarter of this year is likely to see even more rapid declines,” it said.