‘Demand for commercial real estate picks up in few pockets’
A report prepared by real estate consultant Cushman & Wakefield shows that the quarter ended March 2015 witnessed net absorption of office space rise by 35 per cent
Apr 18, 2015
Source : The New Indian Express

 

New Delhi: While the residential real estate market, despite the consecutive cuts in interest rates by the Reserve Bank of India, continues to be bogged down by surging inventory levels and dip in new launches, green-shoots are being witnessed in the commercial real estate sector.
 
In an indication that shows buoyancy on growth expectations of companies in the economy going forward, a report prepared by real estate consultant Cushman & Wakefield shows that the quarter ended March 2015 witnessed net absorption of office space rise by 35 per cent to 7.9 million sq ft (msf) across the top eight cities of the country over the corresponding period last year.
 
However, while the absorption levels went up, the supply growth did not coincide with it and the industry saw new supplies declining by 2 per cent from 7.55 msf in the quarter ended March 2014 to 7.43 msf in March 2015.
 
Bangalore, Chennai lead but Delhi lags
 
The demand, however, is not uniform across geographies and while the biggest jump in absorption during the quarter was seen in Chennai and Bangalore as they witnessed growth in absorption by 1,462 per cent and 512 per cent, respectively, Ahmedabad and the Delhi NCR witnessed a decline in demand and the absorption levels slipped by 75 per cent and 57 per cent respectively.
 
The report points out that the rise in demand in the two major southern cities was on account of pick up in demand from the IT-ITES companies. In turn the demand for IT-ITeS is linked to the revival of US economy and the expected rise in demand for IT services from there.
 
In volume terms, Bangalore witnessed the biggest surge in demand and even as the fresh supply jumped by 1.9 msf, the net absorption stood at 3.2 msf and accounted for almost 40 per cent of the net absorption of 7.9 msf across the eight cities.
 
On the other hand Delhi NCR emerged as the weakest market in terms of drop in absorption in volume terms. While the net absorption stood at 1.46 msf in March 2014, it dropped to 0.62 msf in the previous quarter. In fact Hyderabad and Delhi NCR were the biggest markets in terms of volume of net absorption last year with Hyderabad being at the top with net absorption of 1.73 msf.
 
Even as the demand declined in the Delhi NCR region, the supply kept coming during the quarter and it rose by 26 per cent in the previous quarter over the corresponding quarter last year.
 
Delhi NCR also saw the maximum supply coming in during the quarter and it stood at 2.1 msf during the quarter.
 
The report points out that the decline in the NCR market is on account of delays in decision-making because the demand continues to remains strong from occupiers and there is a large number of transactions in the pipeline.
 
In fact a report prepared by the Cushman & Wakefield on the residential market in February said that the new launches in the year 2014 in the residential segment too declined by 12 per cent over that in 2013 and Delhi NCR witnessed a decline of 30 per cent that was only second to Hyderabad. In unit terms Delhi witnessed the biggest decline from over 38,000 new unit launches in 2013 to 26,800 units in 2014.
 
Mumbai, being an important market particularly in the office space segment, also witnessed a pick up in demand and the net absorption rose by 43 per cent from 7.48 msf in march 2014 to 1.07 msf in the previous quarter. On the new supply front, the Mumbai market witnessed a marginal increase of 4 per cent.

Latest Realty News

PMRDA-set-to-take-on-unauthorised-constructions-from-May-1
Apr 18, 2015
PUNE: The Pune Metropolitan Development Authority (PMRDA) will start functioning from May 1
Urban-plan-overlooks-eco-issues,-experts-fear-city-not-future-ready
Apr 18, 2015
PUNE: Focussed primarily on roads, water supply and public spaces, the civic body's development plan for the old and new city areas has not taken into to account the impact of climate change
Infra-Growth-to-Give-Chennai-Realty-a-Push:-JLL
Apr 18, 2015
Chennai: Development of infrastructure projects like Metro rail and the economic upturn will have a positive impact on the residential, office and commercial real estate segments
Development-plan-marks-Mumbai-cemeteries-for-housing,-road-widening
Apr 18, 2015
MUMBAI: If the omissions and commissions of the city's draft Development Plan (DP) have got the living gnashing their teeth, the dead could be turning in their graves
Aadhar-Housing-aims-to-quadruple-disbursements-in-Gujarat-in-FY-'16
Apr 18, 2015
Ahmedabad: Buoyed by the growing demand in the affordable housing segment, Aadhar Housing Finance Limited (AHFL) is aiming at quadrupling loan disbursements in Gujarat
Shapoorji-Pallonji-group-offers-to-invest-Rs-20,000-crore-in-Hyderabad
Apr 18, 2015
HYDERABAD: Chief minister K Chandrasekhar Rao's plans for a state-of-the-art Secretariat complex has received a shot in the arm with real estate major Shapoorji Pallonji Group offering to build it
Good-tidings-for-home-buyers
Apr 18, 2015
Mumbai: At a time when salaries aren’t expected to increase much, a reduction in home loan rates is a blessing
2000-house-owners-provide-tenant-info
Apr 17, 2015
BHUBANESWAR: Police have received information about tenants from over 2,000 house owners in the city
Probe-into-land-lease-violation
Apr 17, 2015
Patna: Land revenue minister Narendra Narayan Yadav announced a probe into violation in lease of government Khas Mahal land in Patna
Housing-Loans-to-Grow-22%-This-Fiscal-Year:-Icra
Apr 17, 2015
New Delhi: The Centre's focus on affordable housing for all could push overall home loan growth to 20-22 per cent this fiscal year

Latest Realty News Of State

Realty Talk's