Tier-2 cities of India have been witnessing a stabilized domestic demand for residential as well as commercial properties. In fact the domestic demand drives the growth of tier-2 cities.
Tier-2 cities will grow as a result of domestic demand and not on foreign or NRI investors.
Unlike the big cities which witness the demand of NRIs and other HNIs, the smaller cities or tier-2 cities are growing due to the domestic demand for residential and commercial properties. Property prices in these cities are more stable and not rocketing as in the other major cities.
When surveyed among the occupants of tier-2 cities, majority of them opined that the property prices will stand stable in these cities. However a few said that the property prices will be increasing by 70% by the next year. Continue reading →
Outer Ring Road (ORR Bangalore) offers better odds for Bangalore real estate market. Lang LaSalle India reported that Outer ring road is the best performing commercial area in Bangalore.
ORR Bangalore (Outer ring road)turns up as one of the best commercial real estate area.
The latest report of Jones Lang LaSalle India (JLL) revealed that ORR Bangalore is the best performing commercial area. The JLL report specially highlighted the growing importance of K. R. Puram – Marathahalli – Sarjapur Road stretch.
According to the recent studies by JLL the ORR Bangalore has an increased growth. This area has become one of the most performing commercial areas in Bangalore. Whitefield also is said to be included in the best performing commercial areas in Bangalore metropolitan. Continue reading →
The number of high net worth investors (HNIs) and corporates seriously looking to invest in Indian office space has increased manifold in the last few years. Mumbai continues as India’s numerous office space investment destination, with companies from all over the world unerringly zeroing in on the financial capital.
As South Asia’s only true financial hub, Mumbai is among India’s best places to invest in commercial real estate. In times of global economic uncertainty, investors flock to markets that have consistently proved their long-term stability and fundamentals.
In a scenario wherein institutional investors are showing reduced preference for commercial real estate in their portfolios, Mumbai continues to present HNI and corporate investors with myriad growth opportunities in office properties. However, the multitude of options also gives many enthusiastic investors heartburn -where on Mumbai’s vast and complex map are the low-risk/high returns locations?
Today, Mumbai as a city for commercial space investment reveals a high rate of vacancies in many locations. The rental yields in these micro-locations are expected to decrease marginally over the next 12 months.
While this seems to present a depressing scenario on the surface, the fact is that we are now looking at the bottom of the curve. In other words, these markets are expected to bottom out over the next one year and will consequently start to move up again. These locations have significant long-term capital value appreciation potential, and well-informed investors are keeping a close eye on them.
Capital values rose by more than 30-35% in Gurgaon’s residential sector over the last one year. Developers are now going slow on execution of real estate projects, resulting in a drop in supply of residential apartments in most prime markets. Emerging residential areas are still not able to meet the huge housing demand.
Due to rampant construction delays, the expected supply of residential properties announced in early 2009 has not been able to reach the market. Around 500,000 units that were scheduled for possession in key markets by end of 2011 are delayed by another year.
There has been an increase in lateral hiring by corporates. With job scenario improving all over the country, people have more to spend. This has resulted in good investment opportunities, and investor sentiments in the affordable and mid-income segment of Gurgaon’s residential market have improved.
Gurgaon remains promising for office space, and there are good prospects for more major global players setting up operations here in near future. On the whole, this augurs well for the residential property market, more or less assuring relatively healthy absorption of residential space in the times to come. The new infrastructure initiatives being undertaken by the government will also play a crucial role for Gurgaon’s residential and commercial property sectors.
A report was released on Tuesday according to which Indian realty sector might face problem of plenty with office rental space. A further drop in rentals is also expected. As per the report presented by Jones Lang Lasalle Meghraj(JLLM) and Confederation of Indian Industry (CII), the vacancy level in India will increase from 17.2% in 2009 to 20% by the end of 2010.
The report stated that during the first quarter of 2010, most Indian cities have experienced an upward movement in the volume of lease transactions. There have been recorded around a million sq. ft. of leases in each of the cities; Delhi, Hyderabad and Mumbai.
For the future, the report predicts that within the next three quarters, most micro markets are expected to reach their rental lows. This implies that even after balance of power favors the occupiers, the opportunity for then is diminishing with every passing quarter.
The report “The Seven Stars of India India’s best performing micro markets for occupiers” gives the prediction about real estate rental market in cities like Mumbai, Delhi, Bangalore, Chennai, Kolkata, Pune and Hyderabad.
Analysis of the growth in real estate sector in last few years was performed. It revealed some very interesting statistics of the growth. The facts go like this:
In 2007, the office sector experienced highest demand. Grade A office space of about 32 million sq ft leased out in that year. But after that, it has been a decline throughout. In 2008, it reduced to 28 million and a further decrease to 21 million in 2009. However, now a growth back to 28-29 million is seen. Although it is less than what was in 2007, but still is complementary. This demand majorly comes from infrastructure companies, from Indian corporate who wish to merge, from pharmaceutical etc and it is at pace in Bangalore, Delhi and Mumbai.
After the office space, we move on to the residential sector, where once again these three cities are putting their landmarks. Even on the account of increasing prices, these cities have managed to go through a rise in demand. In cities like Mumbai where the pricing went through a downfall of around 25-30%, it has once again come back with the demand as well as pricing. However, the situation is not the same in the other regions of India as far as residential sector is concerned.
Next comes the retail sector. This sector has not seen much growth. Although the demand from some new Indian corporate, the existing retailers and many foreign retailers, this sector still seems to be gloomy for now.
As per some senior executive of JLLM, Jones Lang LaSalle Meghraj, integrated commercial space developments is following the steps of integrated residential complexes and is thus expanding in India.
Mr. Anuj Puri, th Country Head of JLLM said that this is an upcoming trend as well as a saleable one.
Such projects house office space, five-star hotels and retail area among other facilities.
The project in Bangalore from Brigade Group is an example of such projects while there are many more such projects queued up.
As per the expectation of Puri, the margin builders have kept in these projects is higher than that in other projects.
Other examples of such projects are Capital City by BPTP Ltd in Noida which is spread across 21.17 acres and comprises 2.1 million sq ft of office space, Nirmal Galaxy by Nirmal Lifestyle at Mulund in suburban Mumbai.
One of the builders said that there is no doubt in the success of such projects since their housing counterparts are already a success.