Across the major cities, the demand-supply dynamics in the central and alternative business districts remained relatively unchanged, due to lack of any significant addition of new stock, says a CB Richard Ellis study on India's office market in the first quarter of 2008.

Demand for office space in smaller towns was robust and rentals remained firm. Any new supply is expected only towards the fourth quarter of this year, thus insulating rental and capital values from any downward pressure in the medium term, says the CBRE study.

After multiple quarters of extremely restricted supply, high demand levels and double digit value growth, the peripheral and suburban areas are finally expected to witness some correction this year.

The demand-supply gap is expected to be much closer this year, with some micromarkets witnessing surplus stock by end of third quarter 2008. This is a welcome development especially for the large space occupants.

In a significant move for the real estate sector, the Urban Land Ceiling Act was repealed in Maharashtra. This is expected to bring in large areas of land for development. However the impact of this on land prices remains to be seen. A look at the office market view in major metros.

Image: A shopping mall in Gurgaon, about 30 km south of New Delhi.| Photograph: Manpreet Romana/AFP/Getty Images