MUMBAI/BANGALORE: Sluggish commercial market is prompting developers, occupiers and financiers to come up with different ideas to protect their interest and get things going. While developers are tweaking their offerings along with easier payment structures, including installment option, private equity players are opting for strata buys rather than acquiring entire projects for complete control.
Developers are using the time-tested strategy of pushing sales through smaller houses amid high prices in commercial markets too, as large floor plates are not finding many takers given that most corporates have put their expansion plans on hold. Builders are now targeting professionals such as lawyers, CAs, traders and small businessmen with compact offices, lower prices and easier payment options to prop up their cash flows.
Developers are also trying to attract prospective buyers by offering various incentives or packages like monthly installments, 20:80 deferred payment schemes and even fully furnished or ready-to-move-in offices.
"The commercial property market cycle is on a low and there's liquidity stress as residential sales are also stagnant. Smaller offices of 500-1,000 sq ft size are selling the fastest as the ticket size is lower and both end users and investors are buying, given the attractive and low price points while high-net worth investors are buying pre-leased offices," says Ravi Ahuja, executive director at Cushman & Wakefield.
"The seasoned investor knows that the cycle will turn again in the next 3 to 5 years and they are betting on this," he adds.
Royal Palms Estates, a Mumbai-based developer, is offering a scheme to offload its inventory of ready-for-possession offices where the buyer gets possession first and pays a larger part of the price in installments over two years.