Commenting on the Delhi office segment the report points out: The real estate sector faced another quarter of relative inactivity, reflecting the overall economic scenario. Limited transactions and a slow down in new MNC arrivals added to the general pessimism. However increased signs of landlord flexibility, price competition amongst the larger developers and an apparent acceptance of prevailing market conditions, all point towards more realistic Delhi office sector in 1999.

In the Central Business District (CBD) area, there was a revival of leasing activity. Among the notable leasings in the last few months were Malaysian Airlines and Quark's acquisition of 5,800 square feet and 1,500 square feet respectively atthe Ashoka Estate on Barakhamba Road. The building now also houses offices of Toyota Tsusho and Southern Electric. New Bridge and a prominent international law firm acquired 2,700 square feet and 8,000 square feet respectively at Gopal Das Bhawan, in the Connaught Place CBD. ATL leased 8,000 square feet at the DBS Business Centre on the Barakhamba Road.

Among the other concluded deals in the CBD were Dresdner Bank's lease of 5,000 square feet at Amba Deep, Philips' lease of 4,500 square feet at the International Business Centre and Petronet's lease acquisition at the World Trade Centre.

The peripheral areas of Delhi continue to be attractive. Among the notable transactions were British Airways commitment to lease approximately 35,000 square feet at the DLF Plaza Tower in Gurgaon, in the outskirts of Delhi. The leasing reaffirmed that for quality space requirements of this magnitude, Gurgaon remains perhaps the only real option around Delhi, points out the CB Richard Ellis bulletin.

On the likely impactof Ulcra repeal, CB Richard Ellis researcher, Siddharth Yog says, ``There is lot of talk about Ulcra repeal driving down the prices significantly, but that is not actually true. The prices will reduce at most by 5-10 per cent. The reason is more psychological rather than due to any major increase in supply of land. Though a striking fallout will be reduction in litigation.''

Commenting on the Mumbai commercial segment the report says: Increased availability in the traditional CBD has led to softening of values in the suburbs as these alternative locations become less price competitive. As supply has increased the market has become more flexible to the demands of the MNCs, particularly with respect to the terms and conditions of leasing.

The significant lease transactions in Mumbai were ICICI/Prudential's acquisition of 10,000 square feet at the Contractor Building and Reuters' movement to 8,500 square feet at Construction House.