Clear signs of revival in the commercial real estate market. (pic for representation only)
After months of stagnation, the commercial real estate market is showing clear signs of revival according to a report by CB Richard Ellis.
Commenting on the findings of the report, Anshuman Magazine, chairman & MD, CBRE, South Asia said: “The increase in demand is largely due to improving economic conditions, positive market sentiments and growing corporate confidence. However, it would take some time for the supply-demand gap to get bridged, thus both rental and capital values are expected to remain stagnant or under downward pressure in the medium term.”
All the seven cities, presented in this review witnessed marked level of improvement in the market activity as compared to the 2nd quarter of 2009. The rental values remained steady across most micro markets in Q3 2009 with some markets witnessing a marginal increase in rentals.
While most of the micro markets in Mumbai, Bangalore, Hyderabad and Kolkata witnessed a stagnant rental market, rentals in Delhi CBD and Gurgaon witnessed an increase. Additionally, rentals in Chennai and Pune CBD dropped further by approximately 6%, said the report.
Drop in property prices; reduced home loan interest rates and job market stability have brought investors and end users, in equal measures, back to the market. A word of caution though, whilst liquidity conditions have eased out over the last quarter, many developers, especially the smaller ones are still not completely out of the woods. Hence any newly launched project needs to be carefully evaluated from the perspective of the developer’s ability for timely and quality completion, the report added.
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