Property val­ues con­tinue to re­main sta­ble

Largest quan­tum of new launches ob­served in the mid-end cat­e­gory; mainly in cities such as Delhi NCR, Chen­nai and Mum­bai

HT Estates - - HTESTATES - An­shu­man Mag­a­zine

Ex­pec­ta­tions of an eco­nomic turn­around were be­lied with GDP growth slow­ing down to about 4.7% for the fi­nan­cial year 2013–14, mark­ing it as the sec­ond straight year with be­low 5% growth. Agri­cul­ture grew at 6.3% quar­ter-on-quar­ter, while man­u­fac­tur­ing growth dipped to a low of about 1.4% quar­ter-on-quar­ter. A per­sis­tent global eco­nomic slow­down hemmed in In­dia’s ex­ports sec­tor as well, fur­ther hin­der­ing growth prospects.

A bright streak, how­ever, was the emer­gence of a sta­ble po­lit­i­cal dis­pen­sa­tion at the Cen­tre, with a propen­sity to wel­come in­vest­ments and usher in eco­nomic re­forms. For the Union Budget lined up later in July, the new govern­ment is aim­ing at re­lax­ing FDI guide­lines, pro­vid­ing clar­ity on tax re­forms, sup­port­ing in­dus­trial growth, and aim­ing at large scale in­fra­struc­ture cre­ation. The cen­tral bank also took cues from the al­tered po­lit­i­cal en­vi­ron­ment and main­tained sta­tus quo in its lat­est mon­e­tary pol­icy re­view in May, while cut­ting the SLR by 50 bps and re­leas­ing funds worth ₹ 39,000 crore into the mar­ket. It is widely ex­pected that the new govern­ment shall soon al­low the en­try of REITs as in­vest­ment ve­hi­cles, per­mit 100% FDI in e-com­merce and in­fra­struc­ture, while pro­vid­ing tax in­cen­tives to the realty sec­tor at large.

Hous­ing mar­ket up­date

Home­buy­ers and in­vestors who were plan­ning to in­vest in property, have been ex­pect­ing pos­i­tive pol­icy changes that in turn are likely to boost the hous­ing seg­ment, go­ing for­ward. In line with the pre­ced­ing months, the largest quan­tum of new launches were ob­served in the mid-end cat­e­gory; mainly in cities such as Chen­nai, the Delhi NCR, Mum­bai, and Ban­ga­lore. Res­i­den­tial ac­tiv­ity re­mained sub­dued in Hy­der­abad and Kolkata dur­ing the month; while lo­ca­tions such as White­field/ Kanakpura/Har­lur Main Road (Ban­ga­lore), Gur­gaon/Greater Noida (Delhi NCR), And­heri/ Gore­gaon/Kan­di­vali (Mum­bai), and Porur/Perun­gudi/Guindy/ Padur (Chen­nai) wit­nessed sig­nif­i­cant de­vel­op­ment. Cap­i­tal val­ues re­mained largely sta­ble.

Of­fice space up­date

Even though commercial leas­ing ac­tiv­ity picked up marginally in the month of May, ap­pre­ci­at­ing by about 6% q- o- q, the quan­tum of leased space touched its peak for 2014 so far. De­mand was ob­served for small to medi­um­sized of­fice spa­ces for most part, even though the leas­ing quan­tum was driven by a few large trans­ac­tions in Ban­ga­lore, Chen­nai, Hy­der­abad and Pune — con­tribut­ing about 70% to the en­tire space trans­acted dur­ing May.

Ban­ga­lore re­mained the largest con­trib­u­tor to of­fice space de­mand, fol­lowed by Pune and the Delhi NCR; rep­re­sent­ing about 66% of the to­tal space trans­acted dur­ing the month. Oc­cu­pier in­ter­est re­mained strong in mi­cro-mar­kets such as the Outer Ring Road and White­field in Ban­ga­lore, the IT Cor­ri­dor and Ex­tended IT Cor­ri­dor in Hy­der­abad, Yer­wada in Pune, and the pe­riph­eral re­gions of the Delhi NCR (e.g. Gur­gaon). Sec­tors such as IT, BFSI, man­u­fac­tur­ing, telecom­mu­ni­ca­tions and phar­ma­ceu­ti­cals con­tin­ued to drive de­mand for of­fice space.

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