In India, the demand for office space has slowed down

The global slowdown has impacted the demand of office space in the country. Due to the slowdown, many multinationals especially from the IT and banking, financial services and insurance (BFSI) have started consolidating their operations in the country. And this is reflected in falling absorption rates across the country. Absorption rate is the rate at which available homes are sold in the market during a given time period.  It may be noted that during the first half of 2012, the absorption of office space has declined by 32%. The absorption rate in National Capital Region (NCR)-Delhi dropped to 21%while that from Mumbai dropped to 19%. Apart from global slowdown, high interest rate and property prices have been another dampener.  Due to the slowing demand, the supply has also been impacted. In fact, it has fallen by approximately 52% in the first half of 2012. And the situation is unlikely to improve in the second half as well. After the residential downturn, it seems now even the commercial segment is facing the heat.