Commercial property supply dropped 40% in 2011, CBRE

By Accommodation Times (www.accommodationtimes.com)

According to the market researchers CB Richard Ellis reports said that, the supply of commercial properties fall down by 40percent in the year 2011.
The third quarter of 2011 witnessed the addition of more than 5 million sq ft of new supply cross the leading cities of the country. A decline of almost 50% was witnessed in new supply addition when compared to the previous quarter. This can largely be attributed to the slowing pace of construction and projects getting stalled due to the prohibitive level of funding cost.
Another factor for slowdown of construction activity has been the relative sluggish off-take of existing stock. The new supply addition was largely concentrated in NCR, Bengaluru and Pune comprising more than 75% of the entire supply addition in the third quarter. It is expected that supply pressure would be maintained across most of the key IT / ITeS markets across the country, thereby leading to stagnancy in rental values.
The reports more predicts that the upcoming quarters are showing the negative impact on rental values.