Rentals in commercial real estate still remain sluggish in Mumbai and Delhi with huge unutilised office space in these markets and companies scouting for better deals on rentals offered by developers.

The rentals in the National Capital Region (NCR) and Mumbai in the second quarter of the calendar year are back to mid-2006 levels, according to data compiled by CB Richard Ellis. ?The fall in rental in Delhi from 2007 to Q2 of 2011 has been approximately 3-20%, depending upon the location. In Gurgaon, it has been between 10% and 25%, while in Noida, it it 6-7%. In Mumbai, on an average, the rentals fell by around 40% to 45% since 2008,? says CB Richard Ellis CMD Anshuman Magazine.

For example, the Bandra Kurla Complex (BKC), the upcoming business district in Mumbai, where the rentals in buildings like Wadhwa and Platina are believed to be hovering between R220 and R240 per sq ft per month, which market sources say, have come off 30-40% from about R320 to R400 per sq ft seen in 2008.

?Though the leasing off-take has not been too bad with companies expanding operations and moving to better locations, it is an opportunistic market, there is availability of space and corporates are looking for discounts,? says Amit Goenka, national director (capital transactions), Knight Frank India.

At present, of the total 67 million sq ft of Grade-A office space in Mumbai, about a fifth is vacant, according to a recent Jones Lang LaSalle report.

The deals are few and far between. Last month, YES Bank leased out over 1,60,000 sq ft space in Indiabulls Real Estate’s Indiabulls Finance Center in Lower Parel reportedly at rental of R125 per sq ft a month. The rentals, according to market sources, were hovering in the range of R150-155 per sq ft. In second quarter, some of the major leasing transactions included Mcafee leasing 6,000 sq ft space in Solitaire Corporate Park around Andheri, TPG Group leased in The Capital in Bandra Kurla Complex 12,000 sq ft space, while Weatherford picked 25,000 sq ft space in Godrej IT Park around Vikhroli-Powai area.

In Delhi, DBS BANK picked up 16,000 sq ft in DLF Capital Point in Connaught Place, Larsen&Toubro leased 24,000 sq ft in International Trade Tower in Nehru Place, while RBS picked 3 lakh sq ft space in Unitech Infospace Sector 62, Noida. The rentals in Delhi too have come off in the second quarter of 2011.

According to CB Richard Ellis? Market View report of second quarter of 2011, the rentals are at R265 per sq ft per month in Connaught Place against R340 per sq ft per month in 2008. In Gurgaon the rentals are around R85 per sq ft per month against R105 per sq ft per month three years back. In Noida, rentals are at about R37 per sq ft per month against R55 per sq ft per month seen before the global economic crisis of 2008.