Mumbai’s terrorist attack may cut demand for offices and retail space in the nation’s financial capital, Macquarie Research said today. “If the government action does not help bring confidence back for foreign investors, we could see an impact on demand for commercial real estate putting further pressure on rents,” analyst Unmesh Sharma wrote in a note to clients today.

Stocks of Indiabulls Real Estate Ltd., a developer backed by billionaire Lakshmi Mittal, and its Singapore property trust may decline, Sharma said. He rates Indiabulls Real Estate as “outperform.” Gagan Banga, the spokesman for the Indiabulls group of companies, declined to comment.

Indiabulls Real Estate climbed 4.1 percent to 97.90 rupee in Mumbai trading as of 10 a.m. local time. The stock has dropped 87 percent this year, matching the 88 percent decline in the Realty Index of the Bombay Stock Exchange.

At least 195 people were killed and 295 injured in Mumbai last week as terrorists attacked luxury hotels, restaurants, the main railway station and a Jewish center over 60 hours.

“Demand for residential property in south Mumbai is already under pressure due to high interest rates and the unwillingness of developers to cut prices,” Sharma said today. “The attacks may impact sentiment and consumer confidence in the near term.”

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