Rental values in real estate

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With no major leasing transactions witnessed in the CBD area, the

capital and rental values for office space corrected marginally As

compared to Q1 2008, the rental values reduced by around 11 per cent

whereas the capital values depreciated by 13 per cent in the CBD. The

rentals in SBD of Nehru Place dropped by 20 per cent. Further, the

secondary market of Jasola and Saket witnessed a decrease of 8 per

cent in the rental values. The capital values, however, witnessed a

drop of approximately 13-14 per cent in both the markets. The

peripheral markets of Gurgaon and Noida witnessed a drop of

approximately 12 and 16 per cent in Q4, 2008 as compared to Q3, 2008.

The capital values however, depreciated by 9 per cent in both the

micro markets.

Mumbai

Office space take-up is directly impacted by the business outlook and

with the global economic and business sentiments continuing to remain

bearish; the demand levels in Mumbai are likely to remain low over the

short to medium term.

Chennai

The commercial property market in Chennai has never before seen as

dramatic a shift in market dynamics as witnessed in the last quarter.

On one hand the city has witnessed enhanced levels of supply; whilst

on the other there has been a marked reduction in demand during this

quarter as compared to earlier quarters. In light of the economic

prospects, the suburban and peripheral micro markets are expected to

witness further pressure on rental and capital values.

Kolkata

As for Kolkata, the demand levels, going into the first quarter of the

New Year, are likely to be subdued. Rental and capital values expected

to remain under pressure over short to medium term.