Mumbai: IT slowdown shuddered Mumbai's sizzling realty market as Maharastra's IT parks and buildings are to see an extensive expansion in the area utilization sphere. The government is checking on the introduction of a new regulation, which shall open up 80 percent of the total constructed area to be utilized by financial services which is currently 30 percent.

The ratio change is triggered by the drop in the demand for property from the IT sector and the increasing demand in the financial sector, reported Economic Times. This will make the city an international financial center and would help the builders to grip in tenants and buyers from this new sector. As per the notification issued by the government, the buildings, which are eligible for an additional floor space index (FSI) of 100 percent, shall be able to utilize 80 percent of its total constructed area for the financial services. It is extended to other areas of financial services such as corporate, finance, asset and fund management, broking, NBFC, research advisory tax and audit, business and management consultancy, transactions services, treasury operations risk management and credit services. "This change in regulation is therefore positive, and will accelerate the expected commercial space market correction. Previously, only domestic firms could take advantage- now, we will see many MNCs safely occupying these types of buildings," said Pawan Swamy, MD (markets) Jones Lang Lasalle Meghraj

This move will also result to relieve the people of the ever-growing commercial property prices, as it shall increase the supply of commercial price. The declining supply curve made the property pricing shoot up to $400 per sq ft.

More than 100 IT specific buildings in Mumbai and its suburbs are emerging. As per the international property consultant DTZ's report, 15 million sq ft office space is to be completed by 2008. These office spaces shall cater to the growing demands from the financial service sector besides the IT and ITES and shall boost the growth of the commercial property market.