Commercial realty in Punjab
The slowdown was the norm in both residential and commercial segments this year. Though the residential segment saw end-user-driven demand creation and the builders creating supply in the budget and affordable segments, the commercial segment struggled to attract both the end-user and investor-led demand.
Price corrections and low demand marked the commercial realty segment in the state this year. In all commercial categories such as office spaces, and commercial spaces in shopping malls couldn’t generate any demand.
On the supply side, there were no major project offerings in the commercial segment. Builders struggled with large unsold inventories. There were attempts to change the business models. For instance, builders failing to attract realty buyers to shopping malls moved toward the newer concept of high street shopping places. But even these failed to fuel growth in this segment across the state.
For investors, the entry in the segment was unattractive as it couldn’t deliver any positive investment returns to them. At the same time, those already invested in the market struggled to exit. “Though the commercial segment is in the midst of a slowdown for five years, this year can be termed as the worst year so far. Prices in the segment across the state fell by 20% to 50% as there were no takers for the property in the segment. This was the case in both the primary and secondary markets, though, in the primary market the demand levels were lower than the secondary market. The only exception to the trend of price corrections were older markets in cities and properties around religious places such as Golden Temple in Amritsar, which continued to see demand and stable prices,” says Rajiv Manchanda, 48, a Ludhianabased real estate consultant.
Bathinda: The commercial segment in the city registered price corrections between 20% and 50% depending on the property’s location. Vacancy rates were high as unsold inventory with builders
continued to increase with persistent low demand levels. Both end-user and investor demand were low. Rentals were a bright spot for the city’s otherwise gloomy commercial segment. The rentals remained stable, and demand levels were also healthy, say local realty consultants.
Ludhiana: The industrial and commercial capital of the state, Ludhiana, also saw sharp decline in demand and prices in the segment. The city recorded a negative trend in the rental income from commercial properties. Prices and rentals in most locations fell by 20%, except for older markets such as Malhar Road and Sarabha Nagar, where the two were stable. There were high vacancy rates in the periphery, upcoming areas such as Ferozepur Road and shopping malls, say local realty experts.
Patiala: Commercial property prices and rentals in the city fell by 20% to 25% this year. Like other cities in the state, the periphery performed worse than the internal and older developed markets. The low demand in both the capital and rental segments pulled down growth. With limited supply expansion this year, the vacancy rates were relatively low here than other cities, say local realty experts. The city’s interior markets such as Bhupindra Road and Leela Bhawan were exceptions to the negative market trend.
Amritsar: Like the rest of the major cities in the state, Amritsar also witnessed price corrections, but several locations fetched positive investment returns. In a number of locations, the rental incomes declined. With expansion in supply and falling demand for rental properties, rentals declined by 30% this year. Except for internal areas of the old city, the demand for commercial properties for rentals diminished. In more developed areas such as Ranjit Avenue, Model Town, and Lawrence Road, rentals declined, say local realty experts.
Jalandhar: The commercial property prices in the city fell by 20% to 35% this year. The rentals were relatively stable across the city. The main commercial hubs of the city such as Model Town, BMC Chowk and Mahavir Marg were exceptions to the trend of price corrections. The NRI (nonresident Indian) realty investor, a dominant factor in the local realty market, was also absent this year.