The rentals are down by 20-25 % in the industrial belts. It is estimated that more than 15 lakh sq ft of surplus area has been added in the market which is already depressed.

According to sources, with so much supply coming in and few takers, there are very few rental deals happening in the market. For the record, rentals in the Gurgaon industrial belt have come down to Rs 20-30 per sq ft per month from Rs 45-50 . Similar is the situation in industrial belts in and around Surat, Tirupur, Kundli, Panipat and Coimbatore.

Says Rakesh Vaid, chairman, Apparel Export Promotion Council (AEPC): "A lot of garment exporters are downsizing their operations and international market slowdown has dented the demand. We are not in a healthy shape and the government is contemplating withdrawing some of the sops given to us at the time of dollar depreciation. Crude prices are on a record high. To add to it cotton is very expensive. Indonesia and China have a very healthy growth rate but we will have to revise our target downward for this year. All these factors are sure to create some problem for real estate also."

Textile exports account for forex reserves worth $20 billion. It is also India's third largest export revenue earner after petroleum products and gems and jewellery. The high crude oil prices have also impacted the textile industry that consumes a lot of oil for its power requirements.

Many in the industry feel that slowdown in real estate in this sector will have major impact overall as many people park their surplus cash in these properties.

Says Pawan Swamy, MD (markets), JLLM: "The impact on the industrial real estate market is definitely there. Many industries are shifting operations to less expensive and more incentivised zones when they can no longer benefit from the economies of scale at their original locations . They leave behind considerable packets of prime land for development. Textile units, for instance, necessarily occupy considerable areas, further enabled with key utilities such as water and electricity."

These factors have also put a dent on the fresh supply of industrial real estate. Even new plots which are being developed are not finding any takers in the market. Many small developers who are into this kind of development are find tough to sell the built up plots.

Says Hari Kapoor, MD, Allied Exports Industries : "Global clothing industry is stagnant and the US sub-prime crisis has further added to the woes. The US economy has taken a nosedive. Though a lot of garment exporters might say that they have other customers as well, but the US is the biggest customer of the Indian market. When a customer of that capacity and size is hit, we can't remain unhurt. It makes a lot of sense to close down a few manufacturing units and make sure that the remaining ones make profits."